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Great Depression, Great Recession
Well what are the conservatives proposing today - Why Did Tax Cuts ‘All Of A Sudden Become Something We, Quote, Pay For?’
FOUR OAKS -- In these troubled economic times, passionate discussions often center on the Great Depression, Franklin D. Roosevelt and his New Deal. Did FDR and his train of government agencies deal a good hand to millions of Americans?
They did. Roosevelt used the government to provide relief, recovery from the Depression and reform of the economic system. Americans' quality of life improved.
The New Deal brought relief to most Americans. Voters responded by electing FDR to an unprecedented four terms in good part because of his popular programs to help "the Forgotten Man." No amount of conservative spin or revisionist history can change this fact. In the 1936 election, FDR carried 46 of the 48 states.
As conservatives cried "the economy will work itself out in the long run," Harry Hopkins, a Roosevelt adviser, famously replied: "People don't eat in the long run, they eat every day." Sound familiar today?
FDR called for "bold, persistent experimentation" to help Americans. The gold standard was abandoned to stop deflation and stabilize farm and manufacturing prices. The FDIC was created to restore public confidence in the financial system and to protect small depositors. The Glass-Steagall Act required banks to divest themselves of securities operations, separating investment and commercial banking operations. (This was enacted to reduce commercial bank involvement in stock market investment. This act was repealed in 1999, unfortunately.)
The WPA employed about 8.5 million Americans over its seven-year history, in projects that were not to compete with private business. The REA provided loans to local cooperatives that took electricity to 90 percent of rural homes by 1939, up from about 10 percent in 1930. This prompted private business to extend service into the countryside and to lower rates. The TVA brought jobs and electric power to seven states.
The very popular CCC addressed the problem of jobless young men between the ages of 18 and 25. Conservation projects changed the landscape of America over the nine years of the program. The Social Security Act of 1935 assured retirees a pension and benefits for the unemployed.
In 1933, the civilian unemployment rate was nearly 25 percent. If we count people in work-relief jobs as employed, the jobless range was about 10 percent by 1940. During FDR's first term, GDP grew at an annual rate of about 9 percent. The GDP grew about 11 percent annually after 1937-38.
The Great Depression did not end with conservative demands for cutting taxes and spending, or reducing government activity or decreasing the debt. The enormous fiscal stimulus - yes, government borrowing, taxing and spending - to finance World War II led the U.S. out of the Depression. The debt rose from $43 billion in 1940 to $258.7 billion in 1945. The unemployment rate fell to 1.2 percent in 1944. The national debt was fully 121 percent of GDP, compared with an estimated 95 percent today.
A cutback in New Deal spending in 1938 resulted in an economic contraction. The economy expanded again in 1939 as spending increased. Taxing, borrowing and spending - government stimulus - brought the United States out of the Great Depression.
After facing personal economic ruin and our capitalistic system gone awry, did millions of innocent, unfortunate victims appreciate the government help? Did the New Deal programs help get them back on track? You betcha!
E. Wayne Stewart is an adjunct professor of political science at Johnston Community College in Smithfield.
They did. Roosevelt used the government to provide relief, recovery from the Depression and reform of the economic system. Americans' quality of life improved.
The New Deal brought relief to most Americans. Voters responded by electing FDR to an unprecedented four terms in good part because of his popular programs to help "the Forgotten Man." No amount of conservative spin or revisionist history can change this fact. In the 1936 election, FDR carried 46 of the 48 states.
As conservatives cried "the economy will work itself out in the long run," Harry Hopkins, a Roosevelt adviser, famously replied: "People don't eat in the long run, they eat every day." Sound familiar today?
FDR called for "bold, persistent experimentation" to help Americans. The gold standard was abandoned to stop deflation and stabilize farm and manufacturing prices. The FDIC was created to restore public confidence in the financial system and to protect small depositors. The Glass-Steagall Act required banks to divest themselves of securities operations, separating investment and commercial banking operations. (This was enacted to reduce commercial bank involvement in stock market investment. This act was repealed in 1999, unfortunately.)
The WPA employed about 8.5 million Americans over its seven-year history, in projects that were not to compete with private business. The REA provided loans to local cooperatives that took electricity to 90 percent of rural homes by 1939, up from about 10 percent in 1930. This prompted private business to extend service into the countryside and to lower rates. The TVA brought jobs and electric power to seven states.
The very popular CCC addressed the problem of jobless young men between the ages of 18 and 25. Conservation projects changed the landscape of America over the nine years of the program. The Social Security Act of 1935 assured retirees a pension and benefits for the unemployed.
In 1933, the civilian unemployment rate was nearly 25 percent. If we count people in work-relief jobs as employed, the jobless range was about 10 percent by 1940. During FDR's first term, GDP grew at an annual rate of about 9 percent. The GDP grew about 11 percent annually after 1937-38.
The Great Depression did not end with conservative demands for cutting taxes and spending, or reducing government activity or decreasing the debt. The enormous fiscal stimulus - yes, government borrowing, taxing and spending - to finance World War II led the U.S. out of the Depression. The debt rose from $43 billion in 1940 to $258.7 billion in 1945. The unemployment rate fell to 1.2 percent in 1944. The national debt was fully 121 percent of GDP, compared with an estimated 95 percent today.
A cutback in New Deal spending in 1938 resulted in an economic contraction. The economy expanded again in 1939 as spending increased. Taxing, borrowing and spending - government stimulus - brought the United States out of the Great Depression.
After facing personal economic ruin and our capitalistic system gone awry, did millions of innocent, unfortunate victims appreciate the government help? Did the New Deal programs help get them back on track? You betcha!
E. Wayne Stewart is an adjunct professor of political science at Johnston Community College in Smithfield.
Well what are the conservatives proposing today - Why Did Tax Cuts ‘All Of A Sudden Become Something We, Quote, Pay For?’
Earlier this month, Reps. John Boehner (R-OH) and Mike Pence (R-IN) appeared on Meet the Press and were unable to explain their desire to extend the Bush tax cuts for the richest two percent of Americans with their rhetoric about deficit reduction. “Listen, what you’re trying to do is get into this Washington game and their funny accounting over there,” Boehner said, when asked if Republicans planned to pay for extending tax cuts for the rich.
Today, Senate Minority Leader Mitch McConnell (R-KY) ran into the same trouble with MTP host David Gregory, and scoffed at the very notion of paying for tax cuts. “Why did it all of a sudden become something that we, quote, ‘pay for?’” McConnell asked.
In addition to incorrectly stating the effect that the expiration of the cuts would have on small businesses, McConnell basically summed up the Republican approach here, which is that cutting taxes for the rich is either free or worth exploding the deficit to implement. In reality, extending just the tax cuts for the richest two percent of Americans — which President Obama has proposed allowing to expire — costs $830 billion over ten years and $36 billion next year alone.
This week, the Washington Post excoriated Republicans for almost unanimously backing a proposal by Sen. Jim DeMint (R-SC) that would permanently extend all of the Bush tax cuts, calling it “a chilling sign of what a number of lawmakers believe passes for fiscal responsibility.” Of course, maybe McConnell and Senate Republicans simply agree with former Vice President Dick Cheney’s pronouncement that “deficits don’t matter.”
Today, Senate Minority Leader Mitch McConnell (R-KY) ran into the same trouble with MTP host David Gregory, and scoffed at the very notion of paying for tax cuts. “Why did it all of a sudden become something that we, quote, ‘pay for?’” McConnell asked.
MCCONNELL: What are you talking about, paid for? This is existing tax policy. It’s been in place for ten years. [...]
GREGORY: For a final time, I’ll go back to my question which is, the extension of the tax cuts would cost $3.2 trillion. That’s borrowed money, that adds to the deficit. Do you have a plan to pay for that extension?
MCCONNELL: You’re talking about current tax policy. Why did it all of a sudden become something that we, quote, ‘pay for’?
Watch it: GREGORY: For a final time, I’ll go back to my question which is, the extension of the tax cuts would cost $3.2 trillion. That’s borrowed money, that adds to the deficit. Do you have a plan to pay for that extension?
MCCONNELL: You’re talking about current tax policy. Why did it all of a sudden become something that we, quote, ‘pay for’?
In addition to incorrectly stating the effect that the expiration of the cuts would have on small businesses, McConnell basically summed up the Republican approach here, which is that cutting taxes for the rich is either free or worth exploding the deficit to implement. In reality, extending just the tax cuts for the richest two percent of Americans — which President Obama has proposed allowing to expire — costs $830 billion over ten years and $36 billion next year alone.
This week, the Washington Post excoriated Republicans for almost unanimously backing a proposal by Sen. Jim DeMint (R-SC) that would permanently extend all of the Bush tax cuts, calling it “a chilling sign of what a number of lawmakers believe passes for fiscal responsibility.” Of course, maybe McConnell and Senate Republicans simply agree with former Vice President Dick Cheney’s pronouncement that “deficits don’t matter.”
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