The New Deal and the A.R.R.A

The 20th century is replete with big spending programs – the mother of all programs being “The War on Poverty”. With Lyndon Johnson, the government set in motion a series of programs. Some of these programs are still around today including medicare and medicaid. The War on Poverty has spent trillions of dollars the last 43 years, but in its scope and size of its administration, it pales when compared to the New Deal. Johnson, a New Dealer himself, saw the War on Poverty as a limited program but it has turned into something else. The New Deal was meant initially to provide recovery and relief and a second New Deal was aimed at reform of what caused the Great Depression. Now that almost 70 years have passed, a few programs and government agencies are still in effect. However, how does the American Recovery and Reinvestment Act compare to this program?

Both programs dealt with a lot of money and a dramatic increase in the amount of money the government spends. The New Deal is estimated to have cost somewhere between $450-500 billion. While not as expansive in in the government coordination, the ARRA does have not have the government expansion like the Deal. However, ARRA jacks up the percentage the US government is involved in the economy from about 20% to 25%. The New Deal took the government’s role from 4 to 10 percent. But in the end, the New Deal did not revive the economy. Hence, today’s Republicans view ARRA as a New Deal-like program. It’s not. It is far from it. The only similarity is the amount of money being spent. ARRA is going to be disbursed to state and local agencies as well as some current Federal institutions. No new agencies will be created (unless you count There will be no new alphabet soup. Now, when we add in TARP funds, that is over $1.5 trillion in the past year of government spending. I do not know how the ARRA will turn out in two years. Right now, the press sees it as victory. I see it is a 787 billion dollar gamble to do something when nothing just doesn’t cut it.

In the end, when we look at the history of big spending government programs, both the New Deal and ARRA pale in comparison to the War on Terror. Between the Department of Homeland Security and 2 wars, a whopping $5-7 trillion dollars has been spent. Some of it well, some of it not. The same will probably be said of ARRA when it is all said and done. But until the business of doing business in credit and lending is changed and how we get our energy, nothing will change. All of the ARRA components are fine and noble things, but is it what the government should be doing? FDR thought so. So does Obama. The question is not whether you or I do, but whether it will work in the next two years? We will have to be patient to find out.

(Ed. note – Art by Charles Turzak)


One comment

  1. For me its unbelievable when this issue was before our legislative branch of government, referring to the temporarily controlling factions within the GOP; and why would the GOP “only” agree to a bipartisan stimulus bill if it was “one-half” authored by them. Are these folks ready for the fruit juice farm or what? Do they understand the meaning of the word “compromise?”

    Isn’t this why, we in America we go through the trouble of having elections; to see who more or less, which “party” controls the mandates presented before our “elected” congress?

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