April 14

Blog #16 – The New Deal and its Legacy

The main thing that I want to address is the New Deal and its legacy – how Americans changed their views about government, from being laissez-faire about many things (including help during tough economic times to regulating businesses) to lending a helping hand and keeping big business under control/ intruding in private lives and hindering businesses


The reason I wrote this new outlook as two different things is b/c there has been a on-going fight ever since the New Deal began in 1933 (and probably even before that if you want to go back as far as the Progressive Era) as to how much power the federal, state and local governments should have.  Teddy Roosevelt, Taft and Wilson all increased the power of the federal government with their anti-trust lawsuits, union and worker protections, business regulations, progressive income tax, and political reforms.  Harding, Coolidge and to a much lesser extent Hoover (along with the Supreme Court at the time) worked to lessen the power of the federal government or return it back to the laissez-faire times of the late 19th Century.  As we know, Treasury Secretary Mellon decreased taxes on the rich, banks and stock market trading were unregulated, farmers floundered in an economic depression during the 1920s, and people had to rely on private charities, etc. for relief when they were hungry or out of work.  “Hoover’s belief in the power of volunteerism and reliance on the “wisdom of the market” simply didn’t work.”

Since the 1930s, there has been a constant struggle over how much control the government will have over businesses and wages with regulation, and how big the size of the social programs will be that are created to be used as a safety net for the poor. 

Starting with FDR’s New Deal programs that limited insider trading with the Securities and Exchange Commission (SEC), to the Fair Labor Standards Act which set a national minimum wage at 25 cents an hour, to the Wagner Act which for the first time ever in American history guaranteed union rights and created a commission to examine unfair labor practices, to the Social Security Act which created 1.) an old-age pension; 2.) unemployment insurance; 3.) disability insurance for those who can’t work, the size and scope of the American government ballooned like never before. 

Yet, FDR’s critics felt that either he wasn’t doing enough to help the poor (like Upton Sinclair, Huey Long, and others) or that the President was a traitor to his upbringing or upper class (literally the title of a book, Traitor to His Class by H.W. Brands) like the Liberty League.   Many of FDR’s strongest and most vocal critics have lately been champions of the free market or deregulation, laissez-faire business policies, cut taxes on the rich, and reducing or destroying the “American welfare state.”   They accuse FDR’s New Dealers as having Socialist ties or taking their inspiration from Soviet Russia (he had 2), and also opposed President Johnson’s expansion of the New Deal in his Great Society programs like Medicare, food stamps, the creation of PBS and NPR, Head Start education programs, and other government programs created in the 1960s. 


During the past 30 years or so, especially since the election of President Reagan, some New Deal and Great Society programs have been reduced or dismantled.   During the 1980 campaign, Reagan campaigned against big government and promised to reduce the size of it “Government is not the solution to the problem.  Government IS the problem”  – Reagan’s inaugural address, Jan. 20, 1981.   With the size of the government increasing, we were at risk of losing our liberties, something that former president Hoover warned about in his 1934 book, A Challenge to Liberty.  A quote from the book:

“We have to determine,” Hoover wrote with surprising heat, “whether under the pressure of the hour, we must cripple or abandon the heritage of liberty for some new philosophy which must mark the passing of freedom.”

Welfare was reduced by a Republican Congress and a centrist Democratic president, Bill Clinton in 1995.  President George W. Bush tried to privatize Social Security in 2005 by allowing younger workers to invest small portions in the stock market, but that idea was shot down.  And currently, the Republican House wants to cut funding for social welfare programs. 

On the other hand, President Obama and the 2010 Democratic Congress expanded the size and cost of the government dramatically by creating a health insurance program for all Americans who might need it (something President Clinton attempted in 1993 but failed).  Also, President Bush and the Republican Congress of 2005 expanded prescription drug coverage for seniors. 

 And, though President Reagan railed against the size of the government, he along with Congress added $3 trillion to the National Debt during his 2 terms in office, mainly from tax cuts for the wealthy and increased military spending. 

So, what gives?  Is this New Deal legacy just about Republicans vs. Democrats?  Or is it about who has the power in government?   When the government creates spending programs, sometimes these programs don’t just help out the poor and needy; they help out the middle-class and wealthy too (who soon become dependent on the government $$).   Maybe President Hoover was right about the government not giving handouts to anybody – people or businesses.  

And if government leaves businesses and banks alone in a free-market atmosphere, what keeps them from bankrupting the system like they did in 2008?   How can we trust businesses to be honest when we have seen a legacy of greed and corruption in the past few decades? 

My questions: Where is there a perfect balance between government taxing and spending and regulation?  Explain.  Is a perfect balance even possible?   Why or why not? 

250 words total.  Due Friday, April 15


Inequality in America: http://motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph

Why is it so hard to raise taxes on the rich?  http://www.salon.com/news/politics/barack_obama/index.html?story=/politics/war_room/2011/04/14/obama_budget_income_inequality

The fight that just won’t die: http://www.salon.com/news/politics/war_room/2011/04/10/hoover_roosevelt_rapaport/index.html

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Posted April 14, 2011 by geoffwickersham in category Blogs

61 thoughts on “Blog #16 – The New Deal and its Legacy

  1. C.McPherson

    There is a perfect balance between government taxing and spending and regulation when…well pretty much never. So are millions of people who view and see things differently when it comes to paying taxes, or should be paying more and stuff. I feel that if your effecting one group then you also be affecting another, where people can become unhappy and not satisfied with the outcome of decisions being made. As far as spending is concern. I don’t see why the government would want to regulate Americans spending, I mean wouldn’t the government be basically taken our freedom away? Yeah, the government can put regulations on Americans spending but what does it do if at the end of the day you still have to pay taxes. I guess it can government regulation can be okay as long as they don’t take to far where we feel as Americans that we are being controlled. As I was kind of explaining earlier it might be possible, although it would take a lot of work and you would have to take away the corruptness of the government and politians then you may have something to work near, but until that happened I think that having a having a perfect is impossible, and if not impossible it would take a very long time to achieve.

  2. Eleanor Chalifoux

    I don’t believe there ever has or will be a perfect balance between government taxing, spending and regulation. It’s hard to achieve a balance when it never seems like there is enough money coming in to equal the amount of money coming out. The rich feel they are being taxed too much on their hard earned money and the poor don’t pay enough to cover the benefits they receive. In order to improve the bottom line, corporations are moving overseas to avoid paying business taxes because the rates here are too high in order for them to be competitive meaning the United States loses out in getting any money from them at all. If business taxes were reduced and made more competitive we would be able to keep companies here and have their tax money. With unemployment being high, a lot of people are in need of benefits. There is a greater need for benefits now than before with the current economic situation. Less people are able to pay their taxes because of unemployment, the recession etc. People have to be making money in order to be taxed, so the greater number of unemployed people leads to less income for the government. Cities and even the federal government have had to shut down and reduce services because of the hard times and lack of revenue. Perfection cannot be achieved, a group of people will be unhappy either way. There are always disagreements when it comes to taxes and government spending.

  3. Patrice Bell

    I do not think that a perfect balance can ever be achieved between government taxation and spending and regulation. I don’t think this will ever be possible because of how greedy Americans are. Even in the question, you mentioned that we have seen a legacy of greed and corruption in the past few decades. I don’t think that people, Americans especially will ever fully release that need to get something out of everything. I think any person desperate enough, or corrupt enough could find some way to cheat the government out of some money.
    In addition to greed regarding money, we as Americans have an even larger greed for material things. People spend money every day. Some more than others, but regardless, Americans love to spend. The government shouldn’t put regulations on spending because if a person has earned their money and paid their taxes, they should be entitled to spend the rest however they want. Regulations would only make people angry. And if the govt. decides to raise taxes, people will be even more unhappy. No matter how the government decides to handle certain problems, someone is going to end up unhappy. I think the balance would have to come from an agreement between the govt. and the people, which will probably never happen. Whether it’s simply someone who disliked the idea of government of actually finds this a pressing issue, someone will be unhappy and with unhappy citizens, no perfect balance can be achieved.

  4. Connor Mason

    I dont think a perfect balance between government taxing, spending, and regulation. It could help if they changed the system so that the rich dont get richer and the poor dont get poorer but that would obviously upset the rich because they would be getting taxed more and losing more of their income. The tax cuts the government does is also not balanced. They cut the budgets for schools the most yet they say we need to improve our schools the most. They contradict themselves by crippling the one thing they say they need to improve. They have even started cutting funds for librarys! Thats just what we need, to alienate the few readers that are left in this nation. Government spending is also very unbalanced in some areas. They spend money on useless things like bridges and other stuff while they could be putting a lot of the money toward things people would actually appreciate like environment cleanup. Either way, though, someone is gonna be unhappy, whether it be the rich or the poor, no matter what the government changes. I do not believe a perfect balance is ever going to be possible.

  5. Benjamin Sadler

    No, a perfect balance would not be reachable because everyone would have different ideas of how a perfect balance would be. Government will always spend taxes on what they think is the best option to spend them on and a lot of people will disagree. But those people disagreeing have their own ideas of what the taxes should go to and others will disagree. It would be a constant circle of fighting over what goes were and no one would always get what they want and there would be no sense of a perfect balance.

  6. Claire Fisher

    I do not think that a perfect balance between government taxing and spending and regulation. At least, I do not think there is one perfect balance that will work forever. I think sometimes we need be off-balance and sometimes we need to be balanced. This would depend on the sort of economic situation the country was in. If we need a stronger government, we should have a stronger government. If we need more of a free market, then we should have more of a free market. I understand that it sounds kind of haphazard, but I think that there isn’t one way that always works. For example, FDR’s New Deal was made to help the economy. Like the author of the Portrait article, I don’t think that FDR intended the projects he started to be around forever—I think he intended to get the economy back on its feet. When the constitution was composed, it was created so that it could be changed. This allowed for the constitution to change based on society’s needs. Likewise, the way the economy is regulated should change based on what is needed. I also think that there will always be someone who disagrees with how things are. We will not ever be able to make a system which everyone agrees with. The best we can do is try to make things the best for the majority of people. Balancing government taxing and spending and regulation would never work because either way somebody has to lose.

  7. Saul Levin

    A perfect balance between taxing, spending and regulation will never be attainable because there will never be a time when everyone is satisfied. Not everyone would be satisfied even if the income gap was literally evened out or if all people were exact equals with one leader preserving the equality (look no further than Animal Farm for reasoning). Communism was basically Karl Marx’s philosophy that this perfection was attainable. But when Marxism failed it was made evident that it was not. In my opinion, the best thing our country can do is progressively tax everyone (mostly the rich, less so the middle class and even less so the poor) and help the poor through programs like those that FDR instituted in the 1930’s to make the income gap minimal. It would bring our country together in a way that it would not fall apart down the road. When I see the statistics that make up today’s income gap I am astounded. The numbers are downright wrong.

    Taxing the rich can help decrease poverty and the national debt in one point of view while the rich think income taxes are unfair to them. The goal should be to balance this scale as far towards taxation as possible without being too unfair to the rich.

    Overspending always increases the national debt. I’ve been thinking about an idea that may or may not have already been proposed. Perhaps a president should be required to have certain accomplishments in the category of reducing national debt before his presidency ends. Presidents would be more careful about staying on track with a schedule in mind.

  8. Denny Walsh

    Well, the easy answer here would be to simply say that there is no perfect balance but I don’t think that is entirely true. Besides, if I said that there was no perfect balance I wouldn’t be able to express my views as easily and you know I can’t have that. I believe that the U.S government should be as small as it possibly can be. The government is not finished being perfected when there is nothing to add to it, but when there is nothing left to take away from it. The government needs to be as small as possible and only do things that it is entirely impossible for private enterprise to do itself. I believe that the vast majority of the New Deal programs made by FDR have passed the line of what the government should be able to do. One of the main reasons the government needs to stay out of things as much as possible is that the government by nature is highly inefficient. This is because the government can have no competition because it can at any time lower costs with seemingly no adverse effects which eliminates the necessity for an increase in efficiency. I understand that some government programs are necessary such as the public school system, however there are many more that I do not believe are necessary because they can be replaced by private companies. An example of this is public roads. All government programs that are not absolutely essential, however, should be cut. The temporary repercussions of this may be difficult to deal with for many people but I believe that it will be worth it in the end because it will make the country healthier as a whole. I also understand that some government regulation is, unfortunately, necessary in order to provide safety for innocent citizens. One of these regulations is the FDA. There are also, however, regulations that should be eliminated because they are victim less crimes, such as having to wear your seatbelt while driving. It may be stupid not to wear your seatbelt but I believe that in this country people should have the right to be as stupid as they want as long as it doesn’t hurt anyone else. After an extensive cutting of government programs it becomes possible to lower taxes, starting with the rich because they generally are the ones generating the work for everyone else. To sum everything up I basically believe in Reagan’s famous words “Government is not the solution to the problem. Government IS the problem.” I think I might be a little more extreme even then Reagan with how much I want to cut as far as government programs go.

    p.s. sorry its late I thought it was just going up on thursday I didn’t know when it was due

  9. Ryan Stratton

    I hate to say it, but I don’t think there’s a way that we can create a permanent balance between government taxing, spending, and regulation. I also feel that there isn’t a set way we should always run our government. Sometimes, a balance isn’t the best way to run our country, whereas at other points, an unbalanced setup just might be the best way to do things. The reason why a balance would be extremely difficult to achieve is because of the wide array of political views that we have in the United States. There are so many different issues with so many different viewpoints, that keeping everyone happy is nearly impossible. For instance, the question of whether to use a flat income tax or a progressive income tax. The idea of a progressive income tax is good in some people’s eyes due to the idea that it keeps the poor people from getting any poorer. However, those who support the flat tax rate don’t feel that it’s fair that the people who actually produce in the world are being taxed more.

  10. willy thompson

    Blog #16: A perfect balance between government taxing, spending and regulation is not possible. Having over 300 million people living in the US means no one will ever be happy. There are too many opinions, meaning compromise is almost always impossible. The government cannot make everyone happy regarding taxes, because if you tax someone 10%, 10% is alot more money to a poor person than to a rich person. There will always be disagreements between the classes and there is nothing that the government can do about it. Taxes are a touchy issue in America and finding the balance to fuel government spending is virtually impossible. Taxing the people more is not the answer to make the balance more equal, decreasing the spending is. Looking at how much money is spent on defense for our country, I was completely shocked. Why is it that we need to throw our weight around so much, when countries like England don’t blow most of their budget on military? America is like the kid who was really small and picked on as a kid, but he hit his growth spurt and is now the biggest kid in school and he wants to show it to everyone, even though everyone already knows it. The government needs to regulate the economy because when businesses do well, they hire more people, meaning more jobs and more money to tax. The government is the only thing that can make money, and getting us out of this hole we are in will lead to people thinking how we could balance the budget. However, at the moment, we shouldn’t be thinking about how to

  11. Indya Sanders

    Is there a place that has a perfect balance of spending, taxing, and regulating? Not that I know of but if you find one let me know, because I would sure love to go there to see how they’re living. I don’t think there is be a perfect balance between the three nor do I think there ever will be. There are a lot of reasons why there probably will never be a perfect balance such as difference in opinion, rich vs. poor, and the income receiving and spent. I believe this because the perfect balance is all ways someone’s opinion. Some people will think that cutting the rich taxes and increasing military funding is a good balance and others believe that increasing the rich taxes and increasing government funding so we can have healthcare is what’s best for the country. I also don’t think that there is a perfect balance because to me the country is based on the rich getting richer and the poor becoming poorer. There is a growing distance between lower class and upper class. Another reason the perfect balance might not be met is because there is less coming in and more coming out. So that is why the government doesn’t have the “perfect balance”.

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