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Man, do we thank Obama for this fascination with the New Deal lately? How can this remain such a topic of debate here in a forum where we have shown time and time again that the New Deal, at the very least, contributed to the recovery of the US economy from the depression of '29, the depression of '37, and the more general era of the Great Depression ('29-'39)?

The "First New Deal" (begun in FDR's first 100 days of 1933) was a series of programs intended to offer SHORT TERM solutions for the crushing economic crisis the US was experiencing. I refute the contention that the New Deal did nothing to help the "private sector" (even though Jambo's words in his post were "New Deal spending"). Ending Prohibition ALONE opened an avenue of the free market that had been closed for 13 years and had resulted in the closing of 241 independent breweries and distilleries and put 1.7 million people out of work across the nation... without costing the Federal government anything more than the paper involved in repealing the XVIII Amendment, and SAVING the Federal government an estimated $800 million a year in enforcement costs.

I can't make it any clearer than by "graphically" showing what the GDP did from 1933 to 1940, so here it is:

Look at this graph and tell me it doesn't show everything I have been saying for years now... the four-year fall of the GDP from Oct '29 to May of '33 (and you can even see Hoover's abortive attempts to fix the problem with increased government spending and higher taxes in '32!)... the steady rise in GDP from '33 to '37, when the second depression hits... and the continued recovery from that point on.

Now, was the New Deal totally responsible for this... solely and exclusively? No, certainly not. Much of the recovery was a normal cyclical feature of any macroeconomic engine the size and scope of the US... but I don't think there is any question that it CONTRIBUTED. The rise is every bit as constant and strong as the fall was rapid. I see no GDP indication that ANYTHING Hoover was doing prior to July of '32 was effecting the Crash at all... does anyone else? Hell, the RISE in GDP from '33 to '37 is FASTER and more pronounced than what we see in the famous "Roaring Twenties"!

Did specific aspects of the New Deal programs fail? Yes... at least three major programs were determined to be un-Constitutional, but many STILL exist and function, and at least 2 of those are still making the Federal government a PROFIT (TVA at roughly $178 million/year and Hoover Dam at roughly $200 million/year). Other legacy institutions are Social Security, the SEC, FDIC, and Fannie Mae (whose most recent failings are not inherently based on the program, but on the program's mismanagement by corrupt Democratic appointees to its BoD. Fannie Mae was, from '46 to '78, a PROFITABLE Federally owned corporation).

How do I convince you that arguing to the contrary with what I am saying is futile? History vindicates the New Deal... BECAUSE it worked to alleviate the crisis that was the Depression Era. I do not deny that aspects of the crisis, coupled with high government taxes, artificially kept unemployment HIGH for the entire decade, but the Feds offered or created 3.3 million jobs to offset this effect (which may or may not have added to the problem... I know).

This doesn't mean I think the New Deal should have been maintained over the next 39 years, though... I'm a believer in the plan of lowering taxes (or deficit spending) in a down economy, and increased taxes (or a balanced budget) in strong economic times. That means, Ike and JFK should have worked off of balanced budgets far more than they did, and that Carter (and the Democrat Congress) should have been CUTTING taxes (as Reagan showed us).

Why doesn't this make sense to anyone but me?