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Fdr Had The Right Idea Essay

1093 words - 4 pages

Protesters are swarming the capitol city. They are flooding the entrances and lobbies of major government buildings. Thousands have set up makeshift camps. They will not leave until they get what they want. The president is dumbfounded. He wonders how things could have gotten to this point so quickly. His military advisors are prepared to sweep out the protesters with horses and tanks. The president orders the military to act. From that moment on, whether he knows it or not, his presidency is at an end. This is not the story of Hosni Mubarak, President of Egypt, in 2011; it is the story of Herbert Hoover, President of the United States, in 1932. Hoover had tried to battle the Great Depression, but his programs weren’t powerful enough to provide relief. The country didn’t recover until Hoover’s successor, Franklin Roosevelt, spent billions of dollars on his New Deal. In times of economic downturn, laissez-faire is not an option. The government must be actively involved in job creation by spending money on programs to provide relief and employment for the unemployed, as exemplified by Franklin Roosevelt during the Great Depression.
Federal spending on improving infrastructure on a massive scale benefits the nation by increasing corporate economic possibilities, employing the unemployed and increasing aggregate demand. FDR put in place unemployment insurance and social security, showing the government cared for those in need. FDR also allowed inflation to creep up and favored easy credit with regulated, insured banks.
In 2009, Barack Obama faced a crisis nearly as large as Franklin Roosevelt in 1933.
In 2009, many of newly elected President Obama’s economic policies were geared toward the “caring for those in need.” Unemployment benefits were extended and Food Stamp benefits increased. The President also targeted money for infrastructure.
FDR’s policies put an end to Bonus Marchers, Food Riots and radical politics that had sprung up with revolutionary zeal in reaction to Herbert Hoover’s meager, snail-paced recovery measures. To that generation of Americans, Franklin Roosevelt saved the country in a way comparable only to Abraham Lincoln.
Barack Obama’s policies are still in effect and apparently working. The proof is in, government spending cures an economy, just like John Maynard Keynes says. But, are Obama’s policies working? Princeton University Professor Alan S. Binder and Moody Analytics Chief Economist Mark Zandi published “How the Great Recession Was Brought to an End” in July, 2010. They calculated the effectiveness of various parts of President Obama’s American Recovery and Reinvestment Act of 2009 package with a comparison of how much each type of economic policy actually translated into an economic benefit – how much bang did each buck provide. Binder and Moody calculated “The bang for the buck is estimated by the one year $ change in GDP for a given $ reduction in federal tax revenue or increase in...

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