As the price tag for the Democrats’ stimulus packages continues to climb, even as the federal governmetn faces a record budget deficit, I ask Obama supporters, who have such hope that their man will change things in Washington, if they can provide any evidence of such hefty stimuli actually providing anything more than a short-term boost to the economy.
They hem and they haw, perhaps a few will mention the New Deal, but none can come up with more recent examples.Â I mean, if additional federal spending stimulated the economy, we’d be enjoying boom times today.Â And FDR’s New Deal would have caused a steep drop in unemployment.Â Instead, unemployment remained pretty steady through the 1930s, spiking up in 1937 and remaining high until World War II.
If the president-elect and the Democrats really want to “grow the economy,” they need not look so far back for plans to emulate.Â They just need look at Ronald Reagan’s record, but alas Democrats are loath to admit the success of Republican ideas and the failure of their own.
Ronald Reagan’s stimulus was simpler than the Democrats’ proposed boondoggle — and successful.Â He didn’t increase federal outlays, but instead held the line on them, while returning money to the people:
The difference between Reagan’s and Obama’s policies is striking. Reagan stressed private investment. With Obama, as with FDR, it’s public investment. Reagan cut spending in the worst days of the recession in 1981. Obama favors radically increased spending. Reagan sought to boost employment in general. Obama has particular jobs in mind.
If the Democrats had it within themselves to admit that the policies of one of their icons fail to foster economic growth and bringing down the employment rate and to acknowledge that those of one of their great adversaries succeeded, they would help bring about a new era of prosperity while realigning American politics in their favor.