The 2009 Stimulus Package and Hoover

by admin on February 7, 2009

"Indeed, in all essentials, Hoover's actions embodied what would later be called a 'Keynesian' policy. He cut taxes heavily. Those of a family man with an income of $4,000 went down by two-thirds. He pushed up government spending, deliberately running up a huge government deficit of $2.2 billion in 1931, so that the government share of the Gross National Product went up from 16.4 per cent in 1930 to 21.5 per cent in 1931. This increase in government spending, by far the largest in US history in peacetime, reaching $1.3 billion in 1931, was largely accounted for ($1 billion) by a rise in transfer payments.  It is true that Hoover ruled out direct relief and wherever possible he channelled government money through the banks rather than direct to businesses and individuals. But that he sought to use government cash to reflate the economy is beyond question."

- Quote taken from "A History of the Modern World" by Paul Johnson, chapter seven, page 244, revised edition in paperback.

In other news, it looks like the stimulus package will pass the Senate.

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