Forgetting Lessons of Keynes and FDR Brings On the ‘Obama Recession’
newdeal20.org — Just under three quarters of a century ago,in 1937, a group of conservative economic advisers close to Franklin Roosevelt informed the President that they were worried about the rapid rate of growth in the U.S. economy. Since 1933, when FDR took over at the height of the Great Depression, the economy had been expanding steadily, at an average rate of 14 percent per year. The President was advised to cut the budget, reduce deficit spending and tighten the money supply as a means to stave off inflation. Heeding their word, FDR did just that. The results were an unmitigated disaster. FDR launched one of the sharpest economic downturns in American history -- the “Roosevelt Recession”. It is sad to think that history may be repeating itself. But the apparent decision of this administration to embrace cuts over spending may soon lead the President down the same path that FDR took in 1937. Only this time the “Obama recession” of 2011-2012 will most likely cost the current president his job.