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The myth of 'Herbert Hoover economics'"Hoover was sworn in as the 31st president of the United States on March 4, 1929. By the time his term ended four years later, federal outlays had climbed more than 50 percent in dollar terms; they had almost doubled when measured in purchasing power; and they had tripled as a fraction of national income. "If stimulus is the solution to high unemployment," remarks Santa Clara University economist and law professor David Friedman, "the Great Depression should have ended almost before it began."Following the Wall Street crash of 1929, the Hoover administration went into spending overdrive. Real federal expenditures climbed by 4.7 percent between 1928 and 1929, but over the next three years they rose, respectively, 8 percent, 17.2 percent, and 15.7 percent. Exclude military outlays, and spending under Hoover exploded by a phenomenal 259 percent. Looking back at the federal government's growth during the 1920s, economist Randall Holcombe points out that in percentage terms, expenditures grew more during the four Hoover years than they would during the first seven years of Franklin Delano Roosevelt's presidency.FDR is remembered today, of course, for the vast expansions of the New Deal. But as the Democratic standard-bearer in 1932, he lacerated Hoover as a big-spending Republican."For three long years," Roosevelt said in accepting his party's nomination, "I have been going up and down this country preaching that government . . . costs too much. I shall not stop that preaching."Stop that preaching he didn't. He accused Hoover of presiding over "the greatest spending administration in peacetime in all our history . . . an administration that has piled bureau on bureau, commission on commission." He slammed the Republican's record of "reckless and extravagant" spending, and of thinking "that we ought to center control of everything in Washington as rapidly as possible." He mocked those who thought "a huge expenditure of public funds" was the best way to grow the economy of succumbing "to the illusions of economic magic." His running mate, Texas Congressman John Nance Garner, even warned that Hoover was "leading the country down the path of socialism."For his own part, said FDR, "I ask you very simply to assign to me the task of reducing the annual operating expenses of your national government." Indeed, he promised to enforce "absolute loyalty to the Democratic platform and especially to its economy plank." That plank called for "an immediate and drastic reduction of governmental expenditures by . . . not less than 25 per cent."http://www.jeffjacoby.com/9418/the-myth-of-herbert-hoover-ec...It's too bad that FDR broke his promise. It changed the course of history. It set us on the path to Social Security, Medicare, and the rest of the budget mess that we have now.
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