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.
From the President’s weekly address:
For years, the government has spent more money than it takes in. The result is a lot of debt on our nation’s credit card – debt that unless we act will weaken our economy, cause higher interest rates for families, and force us to scale back things like education and Medicare.
Now, folks in Washington like to blame one another for this problem. But the truth is, neither party is blameless. And both parties have a responsibility to do something about it. Every day, families are figuring out how stretch their paychecks – struggling to cut what they can’t afford so they can pay for what’s really important. It’s time for Washington to do the same thing. But for that to happen, it means that Democrats and Republicans have to work together. It means we need to put aside our differences to do what’s right for the country. Everyone is going to have to be willing to compromise. Otherwise, we’ll never get anything done.
That’s why we need a balanced approach to cutting the deficit. We need an approach that goes after waste in the budget and gets rid of pet projects that cost billions of dollars. We need an approach that makes some serious cuts to worthy programs – cuts I wouldn’t make under normal circumstances. And we need an approach that asks everybody to do their part.
And via Brad DeLong, here is President Hoover in 1932:
In his Budget Message for fiscal year 1933, Hoover wrote:
In framing this Budget, I have proceeded on the basis that the estimates for 1933 should ask for only the minimum amounts which are absolutely essential for the operation of the Government under existing law, after making due allowance for continuing appropriations. The appropriation estimates for 1933 reflect a drastic curtailment of the expenses of Federal activities in all directions where a consideration of the public welfare would permit it…. The welfare of the country demands that the financial integrity of the Federal Government be maintained…. [W]e are now in a period where Federal finances will not permit of the assumption of any obligations which will enlarge the expenditures to be met from the ordinary receipts of the Government…. To those individuals or groups who normally would importune the Congress to enact measures in which they are interested, I wish to say that the most patriotic duty which they can perform at this time is to themselves refrain and to discourage others from seeking any increase in the drain upon public finances…
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!
There is, of course, an alternative view of Mr. Obama, repeated nightly by Lawrence O’Donnell, who seems to believe his portrait is more flattering. According to O’Donnell, Mr. Obama is not the economic Hooverite nor the incompetent negotiator, nor one willing to give away valuable public policy, as he appears to be. No, instead, Mr. Obama is a highly skilled liar, who has not only misled the American people with every public statement over two years about his willingness to bargain away Social Security and Medicare benefits, but has persistently negotiated in bad faith with the Republicans, a more sinister version of Mr. Jello.
The most recent breakdown, O’Donnell insists, when Mr. Obama raised the tax increase target after the Gang Of Six (all of whom would have agreed with Hoover) put Obama to the right of Senators Crapo, Chambliss and Coburn, is explained as a calculated tactic to move the goal posts just beyond where John Boehner could reach while his chest is wired with Tea explosives.
So take your pick. The White House is now occupied by a man who agrees with Herbert Hoover’s economics and is clueless about everything we learned about macroeconomics during or since the Great Depression, and he can’t be trusted with the family jewels . . . Or he should be supported because he’s a cynical liar who is willing to misinform the public, negotiate in bad faith, and mouth economic gibberish just to fool people.
The country needs another choice.