Comment 29836

By A Smith (anonymous) | Posted March 30, 2009 at 11:22:35

Ryan >> Most governments seem to have learned the important lessons of the Great Depression:

* Respond to a crisis by injecting liquidity
* Stabilize banking institutions so they don't trigger a vicious cycle of panics, collapses and retrenchment.
* Keep trade between countries open.
* When markets won't spend, the government can prime the pump.
* Use the countercyclical stimulus to build enduring infrastructure that will pay future dividends.

Let's look at the facts. At the end of Hoover's term, total government spending in the U.S. accounted for 17.21% of GDP, an increase of over 80% from when he came into office in 1929. In 1940, after 8 years in office, Roosevelt had increase the role of the government from 17.21% to 17.65% of GDP, an increase of 2.6%.

If you are in favour of Roosevelt's spending policies and not Hoover's, then you're also supportive of not increasing government spending as a share of GDP.

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