A New New Deal won’t work any better than the first one. As FDR Treasury Secretary Henry Morgenthau said about the first one:
“We are spending more than we have ever spent before and it does not work,” he declared in 1939. “We have never made good on our promises…I say after eight years of this Administration we have just as much unemployment as when we started…And an enormous debt to boot!”
Michael Fumento has an article at Human Events about he comparisons of Obama to FDR. It covers much of the same ground I’ve covered on the same topic but its worth a read. An excerpt:
Yet Obama apparently either doesn’t know his history or doesn’t care. He’s just proposed what one news outlet called “a monster new ‘new deal,’” supposedly a two-year plan aiming to create or protect 2.5 million jobs with massive deficit spending.FDR also spooked entrepreneurs, corporations, and would-be stock market investors with a tremendous tax attack. The income tax top marginal rate increased to 79% between 1930 and 1940, the corporate income tax rate doubled from 12 to 24%, and Roosevelt tacked on an “excess profits” tax to boot. He imposed an excise tax on dividends, liquor taxes, and a capital stock tax, while increasing liquor taxes. Finally, he instituted the Social Security payroll tax with a 2% rate.
UCLA economists Harold L. Cole and Lee E. Ohanian assert that but for New Deal anti-free market measures, the Depression would have ended in 1936. In a paper for the Federal Reserve Bank of Minneapolis, they observed Roosevelt believed excessive business competition led to low prices and wages. Therefore, FDR “came up with a recovery package that would be unimaginable today, allowing businesses in every industry to collude without the threat of antitrust prosecution and workers to demand salaries about 25% above where they ought to have been, given market forces. “The economy was poised for a beautiful recovery, but that recovery was stalled by these misguided policies,” Cole said in separate comments.
We cannot improve our economic performance by emulating policies that have failed in the past. The economy is in this shape because we borrowed too much and spent too much. We will not recover by substituting government borrowing and spending for private borrowing and spending. It’s as illogical as it sounds and it won’t work. When the recovery arrives, it will be despite government policy not because of it.