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New Deal Was a Raw Deal for America

Government Spending Didn't Work in 1930s, and Won't Work Now

President-elect Barack Obama believes government spending is the best way to bailout America from its economic woes, and liberals in Congress are having no trouble finding ways to spend your hard-earned money. The price tag of the so-called stimulus plan has steadily increased from $775 billion last week to $850 billion today.

Liberals like to say the New Deal programs of their hero Franklin Delano Roosevelt saved America from the Great Depression. All of that government spending, they argue, gave Americans jobs and boosted the economy.

The numbers don’t tell the same story. As I explained last week, unemployment data from the 1930s — during FDR’s first two terms — remained above 20% despite New Deal spending. Liberals criticized the data used by my colleagues at The Heritage Foundation, arguing we didn’t account for the entire workforce.

As the new chart clearly shows, even when prisoners, government relief workers and the institutionalized are accounted for, unemployment follows the same pattern — and remains much higher than the normal unemployment rate of 5.5%. Conservatives shouldn’t shy away from this fight. Government spending alone will not revive the economy.

New Deal Unemployment Revised

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