| bdbdbd said: @ManusJustus: What Jackson is saying here is, that the New Deal couldn't sustain the economics. Not that it hadn't boosted it. What had the long lasting effect was WWII. Without the second world war, it would have backfired. Where the new deal failed, was the changed spending behaviour of the public. |
For all intents and purposes, this is what I am saying. If the government of today increased spending exponentially (like Roosevelt did), then the GDP would increase and the economy would be booming. The economy, however, would not be any better off because of it. What Roosevelt seemingly forgot and what subsequent presidents have not learned is that you cannot spend the economy out of recession. Tax cuts make more sense, but only if they are not funded by debt or an inflated money supply. The economy needed to hit rock bottom on its own without any government interference. Unfortunately, Hoover was a progressive who advocated tariffs (Smoot-Hawley), construction projects and policies that artificially inflated wages. Had Roosevelt kept to his campaign promisies of reducing debt by decreasing government, increasing free trade and other such measures, the economy may have turned the corner. The economy needed to be free of government interference, and it took the command economy of WWII and the subsequent end of it to free the economy from this interference.
