Warning of dire consequences if we don’t take action to fix the troubled economy, President-elect Barack Obama said on Thursday that whileÂ
we cannot depend on government alone to create jobs or long-term growth . . ., Â at this particular moment, only government can provide the short-term boost necessary to lift us from a recession this deep and severe. Only government can break the vicious cycles that are crippling our economy . . .
So, he favors a massage increase in federal spending, yet provides no evidence that such increases have ever solved economic crises. Â In the two most recent economic crisis of similar (well, actually greater) magnitude than the current one, the two presidents ousting unpopular incumbents who presided over the downturn, enacted vastly different policies. Â
President Franklin Delano Roosevelt continued his predecessor’s policies of government intervention in the economy, but accelerated the increase in domestic federal spending. Â Unemployment remained high throughout the 1930s. Â
Ronald Reagan, as best he could with a House of Representatives controlled by Democrats, reversed his predecessor’s big government policies, held the line on federal spending and deregulated the economy. Â Once his policies started taking effect in 1983, the economy began to grow and unemployment to decline. Â Inflation was held in check.
It seems that like his Democratic forebear, Obama seeks to continue and accelerate his soon-to-be predecessor’s policies. Â During the Bush Administration, the rate of growth of domestic federal spending has outpaced inflation. Â It increased at an even faster rate when the president-elect’s party gained control of Congress.
Mr. Obama’s commitment to an ever greater role for the government in our economy seems to contradict some of his campaign rhetoric favoring a more efficient federal government. Â Not just that, there’s more hope than change in his spendthrift stimulus package. Â Experience has shown us that such projects don’t achieve their intended goal. Â
It didn’t work with FDR. Â The opposite remedy worked with Ronald Reagan. Â But, then again, Obama sometimes seems to style himself as a second Roosevelt. Â Maybe the Democrats love affair with their latest leader is like a second marriage to that liberal icon. Â And we all know the old saying that a second marriage is the triumph of hope over experience.
Well, hope was a theme of Obama’s campaign.