Sen. John McCain (R-AZ), a top Senate critic of President Obama’s economic recovery plan, has been complaining that the package “has no provisions to put us on the path of a balanced budget.” McCain is pushing an alternative plan that he says would achieve this by enacting automatic spending cuts after the U.S. again experiences “positive economic growth.”
Appearing on Hugh Hewitt’s radio show last night, McCain repeated his complaint that Obama’s stimulus plan wasn’t “putting us on a path to a balanced budget.” Later in the interview, he also argued that President Franklin Delano Roosevelt’s policies “exacerbated the Great Depression“:
MCCAIN: The job of the presidency, in my view, is to give people hope, give people hope. Whether you happen to have liked Franklin Delano Roosevelt’s policies, and there’s a number of them I still think exacerbated the Great Depression, but he gave the fireside chats, and gave people hope and optimism for the future. I think that’s, there’s no problem that America can’t prevail over, because we’re still the greatest nation in the world.
It’s not surprising that McCain is pushing the false idea that Roosevelt’s New Deal worsened the Great Depression, which is a common conservative trope. It’s ironic, however, that he is coupling it with a call for including a balanced budget provision in the recovery package.
As Nobel Prize-winning economist Paul Krugman pointed out in November, Roosevelt’s programs were working well until “he was persuaded to balance the budget” in 1937, so “he raised taxes and cut spending and the economy went back down again.” Watch it:
Dean Baker, co-director of the Center for Economic and Policy Research, points out that “Roosevelt’s New Deal Agenda lowered the unemployment rate from 25 percent in 1933 to 10 percent in 1937,” but that the “economy turned bad again” when the “Blue Dogs of the Roosevelt era won sway and got Roosevelt to cut spending and raise taxes.” “This threw the economy back into a serious recession, just as any good Keynesian would have predicted,” writes Baker.
McCain’s alternative plan was killed in the Senate today by a vote of 57 to 40.