Obama Could Learn a Lot From FDR
By James L. Hirsen, J.D., Ph.D.
Ever since Decision 2008 wrapped up, the media have spewed a bunch of bilge about how during the Great Depression President Franklin Roosevelt saved the U.S. economy with gobs of government “stimulus,” aka "central Planning."
Imagine a movie script that told the true story of how FDR’s New Deal didn’t put an end to the Depression but instead actually prolonged the pain of the worst economy in American history.
The plot would include the massive government spending that removed dollars from the only source of prosperity and growth, the private sector, and put it into wasteful, inefficient federal programs.
It’s not possible to have massive spending of taxpayers’ dollars without a hike in taxes.
And when FDR raised taxes, he hit Joe the butcher, baker and candlestick maker from every side, increasing the taxpayer’s burden on income taxes, excise taxes, inheritance taxes, dividend taxes, liquor taxes, corporate taxes, holding company taxes and, of course, “excess profits” taxes. He also invented the Social Security payroll tax.
The sheer weight of the increased tax burden put the brakes on growth and investment and subjected the country to persistent economic doldrums.
FDR helped those who already had jobs by bolstering unions and keeping wages at a high level. This ensured that those who were unemployed would not get jobs. Unemployment under the Roosevelt administration generally remained high until 1941.
If the true Hollywood story of FDR were ever told, dialogue in the script would have to include the 1939 admission of FDR’s Treasury Secretary Henry Morgenthau, in which he said: “We are spending more than we have ever spent before, and it does not work. We have never made good on our promises . . . I say after eight years of this administration we have just as much unemployment as when we started . . . And an enormous debt to boot!”
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James L. Hirsen, J.D., Ph.D.
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