Nobody Shoots Santa Claus
Franklin Delano Roosevelt (FDR) was elected in 1932 to solve America’s greatest economic crisis, the Great Depression. In his first year he increased federal spending 83% and federal debt 73%. Roosevelt created new federal agencies: the Civil Works Administration, the Works Progress Administration, the National Recovery Administration. By 1934, unemployment was 22% and the stock market languished at just 25% of its pre-crash value. The party in power usually loses seats in mid-term elections; in 1934, Democrat prospects looked bleak. Yet they gained seats. How did Roosevelt and the Democrats do it?
When your economic program fails, resort to politics. Roosevelt spent New Deal money where it helped Democrats most. Maine was strongly Republican but held its elections in September, not November; it was used as a test case. One Democrat Congressman bragged that “Maine has received $108 million from New Deal agencies.” Naval contracts flowed to Bath, Maine, while Eastport received funds for a new seawall and a bridge rebuild. In the 1934 mid-term elections, Democrats captured two of three House seats in Maine, and nationally swept to historic victories. The Great Depression dragged on for another six years.
This is relevant today. The American Recovery and Reinvestment Act, AKA the “stimulus,” is an $819 billion spending package that’s supposed to revive the economy. The major spending is scheduled for 2010 through 2012, targeted for maximum political effect, just like the New Deal projects.
Government stimulus programs don’t work. Roosevelt’s Treasury Secretary, Henry Morgenthau, Jr., told Congress in 1939: “I say after eight years of this administration we have just as much unemployment as when we started, and we have enormous debt to boot.” In 1940, unemployment still topped 18%. Japan tried this in the 1990’s. They spent lavishly on infrastructure, piling up mountains of debt. Their economy didn’t improve; the Japanese now call the 1990’s “the lost decade.” In 2008 the U.S. ran a budget deficit of $459 billion, or 3.2% of GDP, and still the recession accelerated. The 2009 projected deficit is $1.4 trillion, or 13% of GDP. When government spends, it must raise taxes or borrow, crowding out private sector investment and stifling job creation.
Expect Democrates to promote stimulus projects. Former Governor Al Smith said of Roosevelt’s spending, “Nobody shoots Santa Claus.” He was right in one respect: people love free money. But it’s our money. Politicians give back what they’ve taken from us, pretending it’s a gift. Obama and his accomplices are turning the U.S. economy into a shovel-ready project. It’s going to take years to dig out.
People that want to learn more can read the book New Deal or Raw Deal: How FDR's Economic Legacy Has Damaged America. http://books.google.com/books?id=HwTPk00QMHIC. Of course the left has many dodges to explain the spending and explain "the real" reason the elections resulted in the wins by saying it was really a statement against Hoover. So expect that if the same Pork gets dolled out, expect to see the Democrats blame Bush.