How FDR Saved the Economy

Mika Brzezinski claimed, "The new deal did not work." I was not shocked that Jim Johnson agreed.

She's right. The New Deal did not end the Great Depression, but World War II did.

Some may claim the War caused massive government spending, it did, but it also sent millions of men into the armed forces to fight the war.

That's not to say New Deal programs (SEC, FDIC, etc) weren't needed. But no one should be under the impression that the New Deal did anything to bring an end to the worst economic crisis in history.

The country was living on rations. Until 2009, America borrowed at it's most during WWII. FDR signed the GI bill into law. That helped veterans get homes and college educations.

Short answer: the economy sucked during WWII. Imagine what the deficit would have been if FDR approved Bush-level tax cuts. Lincoln signed the Revenue Act of 1861 to pay for the civil war. Tax cuts during war are a bad idea.

Obama's middle and lower class tax cuts are intended to make people start spending. The problem is consumer confidence.



Obama has his work cut out for him. The progressive version of trickle down economics is not enough. Americans need to feel confident about where the country is heading. The President needs to make Americans feel the country is on the right path. Only then will consumors spend and lending institutions will give out loans.

Off topic: Congratulations to Jim. He will be blogging at Creative Loafing.