Friday, February 13, 2009

FDR & Barack

The Lehmann Letter ©

We all know there are many in Congress who oppose the stimulus package.

There are also many who support the concept but say the package is too small.

The supporters should take heart and recall the argument over whether or not the New Deal or WWII brought an end to the Great Depression. That argument is shaped by the New Deal’s detractors who say that the New Deal was not effective because the war – not the New Deal - restored full employment. That’s true, but it’s a non sequitur to draw the conclusion that the New Deal was misguided. The proper conclusion is that the New Deal’s public-works projects and deficit spending were well conceived but too small. If only those projects and deficits had been on WWII’s massive scale, the Great Depression might have ended 10 years earlier.

Similarly, President Obama’s stimulus package would be more effective if it was larger. But the political realities of the day dictated its size. That doesn’t mean it won’t do good, and it certainly doesn’t mean that the stimulus is misguided. Just as FDR’s New Deal was the best that could be mobilized under the constraints of that day, reality also constrains what President Obama can do. The stimulus will help even if we wish it was larger so it could do more.

© 2009 Michael B. Lehmann

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