FDL: President Barack Herbert Hoover Obama Explains How to Avoid a Depression

By: Scarecrow Saturday July 23, 2011 9:34 am

On several occasions after the Great Depression began, President Hoover admonished the public and those demanding the government provide economic relief that the nation had run out of money and that it would be irresponsible to borrow and engage in profligate spending. Over 80 years later, we are hearing virtually the same economic gibberish from President Obama.

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What we now face is a President who insists we are in a debt crisis that reputable economists say is phony, a product of deficit hysteria, political cynicism, and economic ignorance.. And he insists the debt crisis requires we take economically damaging steps that will harm the public by undermining popular and beneficial programs to preserve our future. He’s told us we must do this to achieve economic prosperity and that we can’t even have a meaningful conversation about the jobless until this is done so the debt problem is not just a distraction; solving it is a prerequisite to economic recovery. Eat your peas.

Moreover, he’s effectively affirmed the precedent that it’s okay for a crazy, irresponsible, anti-government party to threaten to tank US credit, because the debt limit offers an opportunity to cut government in major ways that might not otherwise be politically possible. God bless the Tea-GOP!

http://my.firedoglake.com/scarecrow/2011/07/23/president-barack-herbert-hoover-obama-explains-how-to-avoid-a-depression/

In about a month, if nothing is done, the federal government will hit its legal debt limit. There will be dire consequences if this limit isn’t raised. At best, we’ll suffer an economic slowdown; at worst we’ll plunge back into the depths of the 2008-9 financial crisis.

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FDR’s initial response to the Great Depression provides an interesting case in point, for Roosevelt came into office as something of a fiscal conservative. In keeping with the fiscal orthodoxy of the time, he called for a balanced budget during his campaign, was reluctant to deficit spend once in office, and even pressed for the successful passage of the 1933 Economy Act as one of his first major pieces of legislation-an act which cut federal spending by nearly 250 million dollars during the first months of his administration.

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