Fear Itself

Michael Steele recently stated that the government has never created a job. This is typical of the Republican response to this Obama administration stimulus package. The Republicans have repeatedly referred to the stimulus package as a "spending" package. The Republicans have also seen fit to equate the stimulus package with FDR's new deal. The link, according to them, is that FDR's spending bills extended the depression and they make the argument that Obama's plan will do the same.

There are a couple of a fallacies in the Republican argument. First of all, the New Deal did not extend the Depression. FDR came in to office with an unemployment rate at well over 20%. While the rate fluctuated for the next ten years, it did generally go down and never again reached the levels of the previous administration. In fact unemployment had decreased to the low double digit range before the start of WWII. The second fallacy in the argument involves job creation. The Republicans credit WWII with ending the Depression. It was true that the war did stimulate spending and get everyone working, but the majority of those new jobs were government funded. Basically, if the government had hired millions of men to join the armed services and precipitated a massive military build up, even without the war, the results would have been the exactly the same.

So while the Republicans bash the current administration for spending money to try and stimulate the economy, they point to the biggest governmental spending program in history as the real cure for the Depression. While the Republicans are doing their best to try and minimize the role of FDR in ending the depression, or at least lessening the effects of the depression, they have unsuspectingly contradicted their own argument. As history has shown us, sometimes the government has to spend money in order to get the economy moving in a positive direction.