Thursday, March 12, 2009

It works.

This graph tracking GDP is the best visual proof I've seen that government deficit-spending works:

Hoover thought that reduced spending and a balanced budget would rectify the downward spiral. He was wrong. FDR was elected in 1932 and immediately began to implement New Deal policies (i.e., big government deficit-spending, mostly on infrastructure). As you can see from the graph, GDP began its turnaround almost immediately. There is a "dip" in GDP that occurs in 1937-38 -- but this is a result of FDR's decision to scale back on government spending, due to political pressure from conservatives who thought the spending was too much. (Obviously they were wrong, too.) Then spending ramps up again in 1939, as part of the build-up for WWII, and the GDP once again begins to climb.

The GOP/conservative myth-making machine wants you to believe that FDR's spending programs made the Great Depression worse. Some conservatives even claim that FDR caused the Depression -- which is, of course, patently false, as it clearly began before FDR was even elected. Conservatives want you to think that FDR failed to correct the Depression, and that it was only WWII that saved us -- but they fail to acknowledge that it was the spending associated with WWII that did it.

Don't believe the myths. As a rule, balanced budgets are preferable. But when recessions (or depressions) are upon us, big government spending works.

It's OK to argue over where the spending goes -- over the merits of pet projects and earmarks, etc. We definitely want our spending to be responsible.

But the conservatives who want to do nothing -- the conservatives who claim flatly that the spending is "too much" -- well...they're just wrong. Don't listen to them. They're either ignorant, or they're lying. Spending works.

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