Obama’s Choice: FDR or Reagan

Barack Obama, it is said, will inherit the worst times since the Great Depression. Not to minimize the crisis we are in, but we need a little perspective here.

The Depression lasted until war orders from the Allies brought U.S. industry back to life. Before 1940, not once did unemployment fall below 14 percent. In May 1939, Treasury Secretary Henry Morgenthau testified:

«We are spending more money than we have ever spent before, and it does not work. … I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. 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.»

... economically, the New Deal was a bust, failing utterly to restore prosperity. Despite the indoctrination of generations of schoolchildren in New Deal propaganda, that is the hard truth.

Harding, Coolidge, JFK and Reagan all bet on the private sector as the engine of prosperity. All succeeded. Reagan’s answer was the tight money policy of Fed Chairman Paul Volcker and across-the-board tax cuts of 25 percent, while slashing the highest rates from 70 percent to 28 percent. From there on out, it was boom times until Reagan rode off into the sunset, having created 20 million new jobs. “The Seven Fat Years,” author Robert Bartley called them.

It was World War II that pulled the United States out of the Depression ditch of the 1930s.

[Whit Obama] Hundreds of billions will go out in checks of $500 to $1,000 to wage-earners and individuals who do not even pay taxes. This is much like the George McGovern “demogrant” program of 1972, where every man, woman and child, if memory serves, was to get a $1,000 check from the U.S. government. Other hundreds of billions will go to shore up state and municipal spending. Other hundreds of billions will go for “infrastructure” projects, another name for earmarks, which is a synonym for pork.

Where in history, other than World War II, is there evidence that such a mass infusion of spending restored prosperity?

Obama and the Democrats are taking a historic gamble, not only with their careers but with the country. If this monstrous stimulus package, plus the trillions in hot money, do not work; if the two ignite rampant inflation, rather than real growth, we are all out of options. The toolbox is empty. And what will follow may truly resemble the 1930s.

By Patrick J. Buchanan
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