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“The New Deal” Versus The New Deal

Brad DeLong and Arnold Kling debate the new deal on The Wall Street Journal’s website. Eventually, they wind up mostly debating large federal entitlement programs. At one point Brad does try to refocus by noting that Medicare and Medicaid came long after the New Deal. It’s worth saying, however, that even Social Security as we understand it wasn’t really created during the New Deal era. The initial program didn’t cover huge swathes of the workforce, didn’t include cost of living adjustments, etc. Read all about the history here and you’ll see that the provisions that make Social Security controversial mostly came in the 50s and to some extent the 70s.

And yet it’s this — Social Security, Medicare, Medicaid — that most people are really talking about when they talk about “the New Deal.” Ronald Reagan is said to have won over the Reagan Democrats by expressing warm feelings for the New Deal but hostility to the Great Society. When people say that, however, that don’t mean that Reagan gave the impression that he wanted to eliminate Medicare, scale back Social Security, and preserve a large series of important-but-obscure regulations to the financial services industry. They mean that Reagan gave the impression of a sympathetic view to large universal entitlement programs combined with hostility to narrowly targeted programs aimed at the poor and identified with the black underclass. And yet, the most controversial of these programs — Aid to Families with Dependent Children — actually does trace its origins to the New Deal.

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