Guess who’s back, back again, Hoover’s back…
This week’s winner(s): just about everyone at the head of the Republican party. You see, the top Republican in the house is calling for a spending freeze.
If your first reaction to the above was something to the effect of “???????????????????” then I’m right there with you.
Apparently the reasoning goes like this: the New Deal had spending. The Depression was not better during the New Deal than before. Therefore, spending money damages the economy. The fact that it was going to get worse whatever FDR did, and that the New Deal cushioned it somewhat seems to be lost on the Right. Yeah, WWII helped finally pull us out completely. But why? Oh yeah, because it meant enormous amounts of spending.
The most elementary principles economics and, quite frankly, coherent thought are ignored here. Let’s break it down. A capitalist economic system requires a high flow of money to sustain itself. A recession or depression occurs when money is not flowing. So to counteract the feedback loop that keeps a recession worsening (less flow -> layoffs -> less flow -> layoffs, etc) the government spends money to artificially keep things moving.
Now, the cult of tax cuts. You see, Ronald Chri…Reagan was in favor of tax cuts. The Republican Party worships Ronald. Therefore they religiously follow the doctrine of tax cuts. Only problem? People tend to save the money from tax cuts, whereas government spending is, by definition, keeping money flowing in the economy. Not exactly difficult to understand, is it?
So yeah, we’ve reached the point where the Republicans now believe that Hoover acted in the best possible way, and that we should imitate him.