Empty Rhetoric

September 09, 2011 at 10:47 AM

 By CAROL VOYLES

      Conservatives say that government stimulus spending is always a bad idea, claiming that it failed during the Depression. They point out that growth slowed in 1937 after government spending was cut, although this seems to indicate that the spending had been having a positive effect. Hoover’s policies had clearly failed, as private sector leadership had proven insufficient. Corporations are understandably reluctant to invest during hard times, as their primary objective is profit.

 In any case, record-breaking government spending finally ended the Depression. Our nation accumulated unprecedented debt during WWII, and yet we thrived. We pulled together, paid our bills, and our national debt as a percentage of GDP remained on a downward trajectory for decades.

 Since 1980 the seductive theory that only tax cuts produce a thriving economy has enjoyed popular acceptance. After taxes were cut the downward trajectory of our national debt abruptly turned into a steep upward climb as growth rates declined. The single exception to this unfortunate outcome occurred during the Clinton administration. Taxes were raised, and we enjoyed our longest period of economic growth and our only balanced budget of the past three decades.

 During times of economic stress government leadership plays a vital role. The stimulus prevented our slide into another Depression, states gladly accepted federal help, and TARP is making a profit. Yes, these programs were undoubtedly imperfect, but neither the public nor private sector can claim perfection. Fortunately, though, government’s primary objective is the welfare of our nation and its citizens.

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