Due to continuing high unemployment rates, more and more people think about another stimulus package to foster economic growth in the United States. Some argue that a big “New Deal” was necessary.
Let aside where the money should actually come from, there is a much more important fallacy to be addressed: The belief that Roosevelt’s New Deal program put the US out of recession in the 1930s. Yet, the opposite is true.
As economist Thomas Sowell describes for Uncommon Knowledge:
The government intervened at a massive scale, and yet, unemployment never came down below double-digits for the entire decade.
Another worthwhile quotation with regards to the New Deal stems from American economist Larry Summers on the Charlie Rose show:
Never forget, never forget, and I think it’s very important for Democrats especially to remember this, that if Hitler had not come along, Franklin Roosevelt would have left office in 1941 with an unemployment rate in excess of 15 percent and an economic recovery strategy that had basically failed.
Swiss Economist 