Monday, July 25, 2011

Obama: Hey, you know who was a fiscal conservative?

Obama: Hey, you know who was a fiscal conservative?
posted at 1:20 pm on July 25, 2011 by Ed Morrissey

Granted, this isn’t as incoherent as Barack Obama’s running mate on FDR in 2008, but it’s close. In his town-hall meeting last week, Obama warned about cutting federal spending and used the example of the 1937 so-called “austerity” budget as his evidence. Referring to Roosevelt as a “fiscal conservative,” Obama told the audience that a reduction in federal spending now would create another recession just like the one that preceded World War II:

FDR comes in, he tries all these things with the New Deal. But FDR, contrary to myth, was pretty fiscally conservative. And so, after the initial efforts of the New Deal and it looked like the economy was growing again, FDR then presented a very severe austerity budget. And suddenly, in 1937, the economy started going down again. And, ultimately, what really pulled America out of the Great Depression was World War II.

CNS News provides the necessary context for this historical ignorance:

However, Jim Powell, author of the 2003 book, FDR’s Folly, How Roosevelt and His New Deal Prolonged the Great Depression said spending cuts to close the deficit had little to do with economic downturn of 1938.

“It’s a misleading analysis. The budget deficit during the Great Depression was such a tiny percent of the GDP, and because it was so small, it’s a hard case to make that these cuts cause the depression of 1938,” Powell, an adjunct fellow with the libertarian Cato Institute, told

No one grew the size of government, taxation and spending in peacetime the way Roosevelt did, Powell said.

“FDR tripled taxes and spending more than doubled from 1933 to 1940,” Powell said. “That was the biggest increase in peacetime spending in American history. Before that, the biggest increases in spending came during wars.”

Further, the New Deal did not bring the economy back and prolonged recovery, Powell said, as unemployment was still at 17 percent by 1940, before war spending began to pull the country out of the depression.

Yeah, those darned fiscal conservatives and their doubling of peacetime government spending and tripling of taxes! Note the similarities between Obama and FDR in this instance, too. FDR tripled spending, and then tried to sell a reduced budget later as “austerity” in much the same way that Obama has suddenly become a deficit hawk looking for spending reductions. The Democratic Congress increased discretionary spending by a third over their four years in the majority, two of which had Obama in the White House and the other two with Obama in the Senate.

If Obama thinks FDR was a fiscal conservative, that demonstrates Obama’s own extremist redistributionism better than anything his opponents could possibly say.

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