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In 1929 the stock market crashed: Similar to the crash in 2008. The president at that time, Herbert Hoover, thought that the way out of the deep recession the economic meltdown had caused was to rely on the private sector to put the country back onto the path to prosperity. He opposed the New Deal that FDR ran on in his winning bid for the 1932 presidency. Hoover’s actions caused a deep recession, like we are in now, to deepen into a depression.
Part of the New Deal was a massive government public works program (the Public Works Administration, created in 1933, oversaw the projects) that put millions to work rebuilding and building our infrastructure. Hoover Dam and Grand Coulee Dam were built during that time, just to name two huge projects. The economy began to take off.
In 1937 the Republicans convinced FDR that the recovery was going well enough that now he needed to focus on the deficit that the government spending had caused . The same things the Republicans are saying and doing now. He cut government spending and the result was a recession within the Great Depression. WWII and the massive government spending program that that was put an end to the Great Depression once and for all.
Right now the Republicans are saying that if we put more money into the hands of the rich and large corporations, or the “job creators” as they like to call them, they will create American jobs. Right now corporations are making record profits and the personal wealth of the really wealthy is increasing. And yet they are not hiring. What makes a person think that by giving them even more money they will all of a sudden begin hiring? They won’t. They will just pocket more money in bonuses and salaries.
Getting taxes lowered for the rich and the large corporations is a huge deep pocketed lobbying effort by the rich and powerful so they can keep more of their money. They do not care about Americans. They can get much cheaper labor and make a bigger profit in Asia. Again, thanks to Republican policies, they actually get a tax incentive to offshore jobs.
What is happening right now is akin to what happened in 1937. By signing that bill, President Obama may have signed the end to his presidency. If he doesn’t come out with some sort of huge jobs bill to put Americans back to work and get the economy going again, we are facing a worse economic mess, thanks to this new bill, than we are in now.
When the stock market realized that the U.S. government was not going to be spending any money on job creation, it went into freefall today and lost over 500 points. All of the gains made this year were wiped out in a single day. Again, this is because of this disastrous bill that was signed into law.
When businesses are not hiring, like they weren’t doing in 1930 and are not doing now, the federal government is the spender of last resort. Say the government puts 1 million people to work. That is 1 million more people paying taxes and not drawing an unemployment check. It is also 1 million people buying things that have to be manufactured and sold to them. More people go to work in the service industry to service these new found wage earners. The people put to work in the service industry now also have more money to spend to buy things, and on and on until the economy is healed. As the economy gets going, the government can lower its spending until we have a surplus.
To make these projects even more effective, the government can insist that all materials and equipment used on these projects have to come from American companies employing American workers. That would include things like concrete, rebar, and heavy equipment. These are jobs that cannot be outsourced.
We need a little deficit spending now, to have a huge payoff in the future. It is the ONLY way we are going to get this country going again. Austerity measures like the Republicans are proposing, the Democrats are going along with, and President Obama is signing into law are the wrong things to do. They take this country in the opposite direction it needs to go. When government quits spending money, people get laid off which is less people paying taxes and more people drawing unemployment…you know the rest of the story.
It is hard for me to believe that our politicians are listening to basically the same arguments the Republicans made in 1937. AND the Democrats are swallowing them hook, line, and sinker.
Unless something is done, and done quickly, we are heading for a lot worse misery than we have now. If we have another crash, which at this point some economists put at 50/50, President Obama is done. The Republicans could run Casey Anthony and she would probably win.
Republican policies do indeed work. However they only work for the already rich and the large corporations.
All Americans need to push their legislators to come up with a jobs bill. You can find the way to contact your elected officials here: