Republicans Fearing For Their Political Lives Over Bush SS Plan

[Bronco_Beerslug]

Bush's plan is DOA so now we'll see who has the cojones to eliminate the SS cap and or raise payroll taxes to fund these personal accounts (SS reform).

-----------------------------------------------------------
House Republicans Skeptical on Soc. Sec.
By LAURA MECKLER, Associated Press Writer

WASHINGTON - President Bush (news - web sites)'s Social Security (news - web sites) proposals stirred fresh political worries Thursday among Republicans and brought calls from some lawmakers to abandon the president's central idea: letting people divert part of their payroll taxes to private retirement accounts.

"I've talked to some of my colleagues and they're panic-stricken," said Rep. Mark Foley (news, bio, voting record), R-Fla., who said he welcomes a serious debate over the sweeping changes Bush outlined in his State of the Union address Wednesday.

"Politically speaking, right now it's probably not doable," said Sen. Pete Domenici (news, bio, voting record), R-N.M., citing lack of Democratic support.

Two House Republicans with years of expertise on Social Security offered an alternate plan, saying the Bush proposal is too politically risky. They suggested bolstering the program with money from general revenues rather than the payroll tax.

"I think politically it's the most salable. It's not going to scare anybody," said Florida Rep. Clay Shaw, who for six years was chairman of the House Ways and Means subcommittee on Social Security. "It does preserve Social Security as it is today. If we're going to attract some Democrats, that's the way to go."

The subcommittee's current chairman, GOP Rep. James McCrery of Louisiana, said taking money out of the existing Social Security system for private accounts gives a powerful argument to the plan's opponents, including the 35-million member AARP.

"The AARP and the Democrats think if you divert some money from the trust fund," the existing program will be undermined, McCrery said. "That is true on its face. It does decrease the level of the trust fund. Politically, that's going to be a very strong tool that (opponents) can use to defeat a plan."

"There are a lot of unanswered questions and until I have the answers to them, I am still in the 'withholding judgment' category," said Rep. Ginny Brown-Waite (news, bio, voting record), R-Fla. Her Gulf Coast district is home to about 250,000 Social Security beneficiaries, the most in any single House district.

Bush wants to let workers divert up to two-thirds of their Social Security taxes into private accounts that could invest in stocks and bonds. At the same time, the guaranteed benefit would be cut, though by how much is not clear.

Many Democrats favor personal accounts, but want them in addition to benefits paid by Social Security.

In the Senate, not a single Democrat has endorsed Bush's proposal.

Under Senate rules, supporters would need 60 votes for their plan if Democrats try to block it. That means proponents would have to persuade at least a few of Democrats to join them if the plan is to become law.

Some Senate Republicans also have doubts. Sen. Susan Collins (news, bio, voting record), R-Maine, said Thursday there is no consensus for action now and said she has not made up her own mind. "We should take this year to study the issue and come up with solutions," she said.

GOP Sen. Olympia Snowe (news, bio, voting record) of Maine, a member of the Senate Finance Committee that will handle the Social Security legislation, has said she opposes diverting the program's taxes to pay for personal accounts.

Bush took his campaign for Social Security changes on the road Thursday, traveling to states represented by Democratic senators the White House hopes to pressure into backing his plan.

At least one of those Democrats, Sen. Max Baucus (news, bio, voting record) of Montana, said he opposed diverting payroll taxes into the personal accounts.

The idea "would be extremely difficult for the Senate to swallow, almost impossible," Baucus said in an interview Thursday.



McCrery and Shaw said in separate interviews that, like Bush, they want to create personal accounts. But they said they favor paying for them with general revenue, which probably would mean borrowing the money.

In that case, they said, taxes collected for Social Security would be left alone to pay for traditional program benefits.

Shaw said he planned to reintroduce legislation on this plan.

Sen. Rick Santorum (news, bio, voting record), the No. 3 Republican in the Senate, acknowledged the dissent but said it should diminish as members of Congress learn more.

"We have a lot of work to do, not just among the American people, but in our own caucus," said Santorum, R-Pa.

Rep. Jack Kingston (news, bio, voting record), R-Ga., who serves in the House leadership, appeared less worried. He said he left a GOP retreat last week convinced members were "enthusiastic about taking on a challenge and giving it a good honest effort."

On Thursday, Democratic senators sent a letter to Bush saying they fear the plan will increase the national debt.

Five Senate Democrats spoke at the memorial to President Franklin D. Roosevelt, who signed Social Security into law in 1935.

"We are here by FDR's statue because we believe that Social Security is the greatest government program of the 20th century," said Sen. Charles Schumer (news, bio, voting record), D-N.Y. "We ought to keep it, not gut it."

___

Associated Press writer Ken Thomas in Miami contributed to this report.
http://story.news.yahoo.com/news?tmpl=story&cid=514&e=7&u=/ap/20050204/ap_on_go_co/social_security

[Bronco_Beerslug]

Big change spelled out; big question left out

News analysis by William M. Welch, USA TODAY

President Bush offered his much-discussed proposal for Social Security private investment accounts Wednesday night. What he didn't offer was a solution to the system's future fiscal shortfall. (continued)

http://story.news.yahoo.com/news?tmpl=story&cid=710&e=4&u=/usatoday/20050203/pl_usatoday/bigchangespelledoutbigquestionleftout

[Garcia Bronco]

"We are here by FDR's statue because we believe that Social Security is the greatest government program of the 20th century," said Sen. Charles Schumer (news, bio, voting record), D-N.Y. "We ought to keep it, not gut it."

What century is it now?

[L.A. BRONCOS FAN]

Republicans Fearing For Their Political Lives Over Bush SS Plan

Unlike the AWOL monkey, most of them have to face the voters again.

They know most of their constituents don't support Smirk's reverse-Robin Hood SS scheme.

(Except for those masochists/morons who would rather trust the Ken Lays of the world with their retirement funds than Uncle Sam.)

[L.A. BRONCOS FAN]

http://www.bartcop.com/bush-hog.jpg

[Bronco_Beerslug]

Social Security plan doesn't bridge fiscal gap
The White House implies benefit cuts are inevitable even with privatization
By BENNETT ROTH
Copyright 2005 Houston Chronicle Washington Bureau
WASHINGTON - Hours before President Bush urged Congress to reform Social Security, the White House acknowledged Wednesday that his plan for individual retirement accounts would leave the system's fiscal woes unsolved, implying that benefit cuts are inevitable.

The administration estimates that over the next 75 years, Social Security will have a $3.7 trillion funding gap because payroll taxes will not generate enough income to pay all of the promised benefits as baby boomers retire.

The president listed in his State of the Union speech the controversial measures proposed in the past to trim Social Security costs, such as trimming benefits for the wealthy, raising the retirement age and changing the way benefits are calculated.

(snip)
Critics have warned that such accounts would be expensive to administer and would be largely a boon to investment firms.
http://www.chron.com/cs/CDA/ssistory.mpl/nation/3022230

[Garcia Bronco]

You guys and gals kill me.

[Mile High Shack]

apparently everyone wants to rely on the government and not themselves

there are cases, such as disability and other situations where it is necessary...but a lot of cases it isn't

case in point...my dad and father-in-law both get SS since they are over 65, but they are still working

so they are getting money that they don't really "need" per say. Sure they earned it by paying into it, but why get it now, why not wait till they stop working?

OUR dudes that have millions of dollars saved up for retirement, you are going to tell me they need SS? but yet a lot of these people feel entitilted to it.

There are so many problems with SS it's crazy, it isn't the greatest thing ever invented in the 20th century...it was one of the worst.

People shouldn't rely on the government for money.........at least people that can work.

[L.A. BRONCOS FAN]

"Bush is reforming social security the same way he reformed the economy and everything else he's done as president.

He's changing it from working to broken.

We went from the biggest surplus in the history of the world to the biggest deficit in the history of the world.

Now he's going to destroty social security the same way.

It's all about giving tax cuts to the rich while old people live in poverty and eat dog food."

- Marc Perkel

http://www.bartcop.com/monopoly-ss-game.jpg

[W*GS]

We can always count on LABF for rhetorical excess - someone else's generally.

[TexanBob]

The press, Democrat house organs that they are, are going to attack Bush's plan the same way they attacked the War in Iraq - with likely the same result. They'll call it dead in the water. They'll call it a quagmire. They'll say it will never work, etc.

Yes, there will be some changes once this goes through committee but, unless the Democrats really want to filibuster this and risk alienating every voter under 40 in order to kiss up to every voter over 65, the Republicans have the votes to pass this once the lines are drawn. That's the reality of the new term. The GOP isn't beholden to a few fruitcakes like McCain or Specter anymore. One or two can leave the reservation and their bills can still pass.

In short, I'm not buying the Dem's PR campaign (through AP). There's a long way to go on this one and the timing for this is right.

If Social Security becomes insolvent, do the Democrats want to be the ones responsible for killing it? That would be some tribute to FDR...

[Bronco_Beerslug]

The press, Democrat house organs that they are, are going to attack Bush's plan the same way they attacked the War in Iraq - with likely the same result. They'll call it dead in the water. They'll call it a quagmire. They'll say it will never work, etc.

Yes, there will be some changes once this goes through committee but, unless the Democrats really want to filibuster this and risk alienating every voter under 40 in order to kiss up to every voter over 65, the Republicans have the votes to pass this once the lines are drawn. That's the reality of the new term. The GOP isn't beholden to a few fruitcakes like McCain or Specter anymore. One or two can leave the reservation and their bills can still pass.

In short, I'm not buying the Dem's PR campaign (through AP). There's a long way to go on this one and the timing for this is right.

If Social Security becomes insolvent, do the Democrats want to be the ones responsible for killing it? That would be some tribute to FDR...

Wrong, the republicans know it's dead in the water because they won't risk alienating the voters (the people who actually vote in numbers = older Americans) in this country because everyone of them are up for reelection in '96. So it's a bi-partisan effort that will doom any plan (Bush's paln) to cut benefits, borrow the trillions needed or not raise taxes to fund it.

[Rascal]

Wrong, the republicans know it's dead in the water because they won't risk alienating the voters (the people who actually vote in numbers = older Americans) in this country because everyone of them are up for reelection in '96. SO it's a bi-partisan effort that will doom any plan (Bush's paln)to cut benefits, borrow the trillions needed or not raise taxes to fund it.

No you are wrong.

[Bronco_Beerslug]

No you are wrong.
And then ........ brainlock?

[Rascal]

No, just that. You are just wrong.

[L.A. BRONCOS FAN]

We can always count on LABF for rhetorical excess...

We can always count on W*GS to cover Dim Son's flank at the expense of truth, fact, logic, and ethics.

...- someone else's generally

This from a lemming whose perceptions of reality are informed almost exclusively by the BushCo lapdog corporate media?

That's rich. LOL

Bush record awful compared to Reagan but very horrible compared to Clinton

FACTS

-- SHOCK & AWE--

Democrats Create Wealth and Jobs

1.From Harding In 1921 to Bush in 2003

2.Democrats held White House for 40 years and Republicans for 42.5 years.

3.Democrats created 75,820,000 net new jobs -- Republicans 36,440,000.

4.Per Year Average—Democrats 1,825,200---Republicans 856,400.

5.Republicans had 9 presidents during the period and 6 had depression or recession.

6.Republicans had a recession/depression in 177 months and Democrats in 32 months.

7.DOW—grew by 52% more under Democrats.

8.GDP—grew by 43% more under Democrats.


Comparing Clinton versus Reagan

1.JOBS—grew by 43% more under Clinton.

2.GDP---grew by 57% more under Clinton.

3.DOW—grew by 700% more under Clinton..

4.NASDAQ-grew by 18 times as much under Clinton.

5.SPENDING--grew by 28% under Clinton---80% under Reagan.

6.DEBT—grew by 43% under Clinton—187% under Reagan.

7.DEFICITS—Clinton got a large surplus--grew by 112% under Reagan.

8.NATIONAL INCOME—grew by100% more under Clinton.

9.PERSONAL INCOME—Grew by 110% more under Clinton.


SOURCES—Bureau of Labor Statistics (www.BLS.Gov)

Economic Policy Institute (EPI.org)—Global & World Almanacs from 1980 to 2003 (annual issues)

www.the-hamster.com (chart taken from NY Times)

National Archives History on Presidents. www.nara.gov

[L.A. BRONCOS FAN]

http://www.bartcop.com/dubya-say-do.jpg

[TexanBob]

The Democrats basically have just one arrow in their quiver now, to filibuster in the Senate. The only other weapon they have is for the media to try to scare enough Republicans into voting against it.

It's hilarious how the Democrats can pronounce anything as "dead in the water" (except Mary Jo Kopechne) when they don't control shiat anymore. You have to have the VOTES to get your way and the Democrats don't - and they'll have even less pull if the Republicans get sick of the filibusters and change the Senate rules.

All the Democrats can hope for is to cry "wolf" and hope they scare enough Republicans out of getting this through. That's why the media is going to carry their water over this. The media (and activist judges) is all the Left has now to counteract the GOP.

Of course, with Senate Republicans being the gutless cowards that they are, this may be all it takes to snuff out something they should be able to win easily but you can bet the White House is going to do some serious arm-twisting on this one, just like they did with tax reduction.

[L.A. BRONCOS FAN]

http://www.bartcop.com/lame_game.jpg

[L.A. BRONCOS FAN]

Expensive nonsense from expensive liars

Bush's budget screws those who need help the most

You have to give Putsch credit for sheer, bald-faced audacity. On one hand, he wants to cut funding for Medicaid, farmers' payments, student loans and veterans’ medical services $137 billion over the next decade to reduce the huge deficits. But at the same time he wants to make permanent tax cuts that would increase the deficits by about $250 billion over the same time.

Putsch reportedly said, "It's a budget that focuses on results. The taxpayers of America don't want us spending our money into something that's not achieving results." Money for disabled vets and Amtrak doesn’t produce any worthwhile results, but giving money to people who don’t need it does. Republinomics... Give all of America’s money to the super rich, and they will take good care of us.

Some of the cuts defy belief. In the middle of two wars, he wants to double the co-pay Vets have to fork out for medications.

http://www.zeppscommentaries.com/Politics/fy2006.htm

[W*GS]

We can always count on W*GS to cover Dim Son's flank at the expense of truth, fact, logic, and ethics.

Snort.

One little factoid (and that's all they are, out-of-context factoids) on your list is wrong:


6.Republicans had a recession/depression in 177 months and Democrats in 32 months.

Doesn't the 9 years (1932-1941, 108 months) of the Great Depression under FDR count against Democrats?

The whole list is rather silly. Percentages are often used to hide or obfuscate, and I didn't see any indication that these numbers were corrected for inflation, population growth, and other factors.

What does "DOW—grew by 52% more under Democrats" mean, anyway? That the net difference (defined as the index at the end of each Presidency minus the index at the beginning?), summed over each Democratic administration, is a 52% bigger number than the net difference summed over each GOP administration? Are the changes in the DJIA taken into account?

There's lots of ways to tell half-truths with numbers and statistics, and LABF, thanks for proving that.

[L.A. BRONCOS FAN]

Doesn't the 9 years (1932-1941, 108 months) of the Great Depression under FDR count against Democrats?

More revisionist history from the board GOP apologist.

Let's dispell W*GS' bullsh*t with a few basic facts:

The Roaring Twenties were an era dominated by Republican presidents: Warren Harding (1920-1923), Calvin Coolidge (1923-1929) and Herbert Hoover (1929-1933). Under their conservative economic philosophy of laissez-faire, markets were allowed to operate without government interference. Taxes and regulation were slashed dramatically, monopolies were allowed to form, and inequality of wealth and income reached record levels (sound familiar?)

Truly massive intervention began only under the presidency of Franklin Roosevelt in 1933, who was sworn in after the worst had already hit. Although his New Deal did not cure it, all the leading economic indicators improved on his watch.

[W*GS]

More revisionist history from the board GOP apologist.

You're the ace revisionist, son.

Let's dispell W*GS' bullsh*t with a few basic facts:

Drop the vulgarity, and get some real facts.

The Roaring Twenties were an era dominated by Republican presidents: Warren Harding (1920-1923), Calvin Coolidge (1923-1929) and Herbert Hoover (1929-1933). Under their conservative economic philosophy of laissez-faire, markets were allowed to operate without government interference.

WRONG.

There has never been a period of laissez-faire capitalism in the history of the US.

"Without government interference"? Pshaw.

Taxes and regulation were slashed dramatically, monopolies were allowed to form, and inequality of wealth and income reached record levels (sound familiar?)

Prove it. Provide verifiable statistics.

Truly massive intervention began only under the presidency of Franklin Roosevelt in 1933, who was sworn in after the worst had already hit. Although his New Deal did not cure it, all the leading economic indicators improved on his watch.

Another lie. 1937-1938 was worse, statistically, than when FDR took office in 1932, primarily because of the "truly massive intervention" from the New
Deal. It only exacerbated the problems created by prior governmental interference.

Recessions arise from the normal business cycle, and are a correction of imbalances. Depressions arise when the government steps in and really messes things up. ALWAYS.

[TexanBob]

There have been so many safeguards put into the stock market since the 1929 crash and subsequent nosedives that any comparison to 1920s economic policies and 2005s are ludicrous on their face. It's simply pointless to debate.

[L.A. BRONCOS FAN]

WRONG.

There has never been a period of laissez-faire capitalism in the history of the US.

This has to be one of the most delusional statements I've ever seen you make.

You have been drinking the GOP Kool-Aid for so long you need to spray your brain with Lysol.

Another lie. 1937-1938 was worse, statistically, than when FDR took office in 1932, primarily because of the "truly massive intervention" from the New
Deal. It only exacerbated the problems created by prior governmental interference.

Recessions arise from the normal business cycle, and are a correction of imbalances. Depressions arise when the government steps in and really messes things up.

Good Lord. :pity:

It's obvious that we need to correct the right-wing propaganda you're parroting here with some facts and some unrevised history.

TIMELINES OF THE GREAT DEPRESSION:

The importance of these timelines cannot be emphasized enough. Seeing the order in which events actually occurred dispels many myths about the Great Depression. One of the greatest of these myths is that government intervention was responsible for its onset. Truly massive intervention began only under the presidency of Franklin Roosevelt in 1933, who was sworn in after the worst had already hit. Although his New Deal did not cure it, all the leading economic indicators improved on his watch.

But don't take my word for it -- here is the raw data:

TIMELINE OF GENERAL EVENTS

1920s (Decade)

* During World War I, federal spending grows three times larger than tax collections. When the government cuts back spending to balance the budget in 1920, a severe recession results. However, the war economy invested heavily in the manufacturing sector, and the next decade will see an explosion of productivity... although only for certain sectors of the economy.

* An average of 600 banks fail each year.

* Agricultural, energy and coal mining sectors are continually depressed. Textiles, shoes, shipbuilding and railroads continually decline.

* The value of farmland falls 30 to 40 percent between 1920 and 1929.

* Organized labor declines throughout the decade. The United Mine Workers Union will see its membership fall from 500,000 in 1920 to 75,000 in 1928. The American Federation of Labor would fall from 5.1 million in 1920 to 3.4 million in 1929.

* "Technological unemployment" enters the nation's vocabulary; as many as 200,000 workers a year are replaced by automatic or semi-automatic machinery.

* Over the decade, about 1,200 mergers will swallow up more than 6,000 previously independent companies; by 1929, only 200 corporations will control over half of all American industry.

* By the end of the decade, the bottom 80 percent of all income-earners will be removed from the tax rolls completely. Taxes on the rich will fall throughout the decade.

* By 1929, the richest 1 percent will own 40 percent of the nation's wealth. The bottom 93 percent will have experienced a 4 percent drop in real disposable per-capita income between 1923 and 1929.

* The middle class comprises only 15 to 20 percent of all Americans.

* Individual worker productivity rises an astonishing 43 percent from 1919 to 1929. But the rewards are being funneled to the top: the number of people reporting half-million dollar incomes grows from 156 to 1,489 between 1920 and 1929, a phenomenal rise compared to other decades. But that is still less than 1 percent of all income-earners.

1922

* The conservative Supreme Court strikes down federal child labor legislation.

1923

* President Warren Harding dies in office; his administration was easily one of the most corrupt in American history. Calvin Coolidge, who is squeaky clean by comparison, becomes president. Coolidge is no less committed to laissez-faire and a non-interventionist government. He announces to the American people: "The business of America is business."

* Supreme Court nullifies minimum wage for women in District of Columbia.

1924

* The Ku Klux Klan reaches the height of its influence in America: by the end of the year it will claim 9 million members. It will decline drastically in 1925, however, after financial and moral scandals rock its leadership.

* The stock market begins its spectacular rise. Bears little relation to the rest of the economy.

1925

* The top tax rate is lowered to 25 percent - the lowest top rate in the eight decades since World War I.

* Supreme Court rules that trade organizations do not violate anti-trust laws as long as some competition survives.

1928

* The construction boom is over.

* Farmers' share of the national income has dropped from 15 to 9 percent since 1920.

* Between May 1928 and September 1929, the average prices of stocks will rise 40 percent. Trading will mushroom from 2-3 million shares per day to over 5 million. The boom is largely artificial.

1929

* Herbert Hoover becomes President. Hoover is a staunch individualist but not as committed to laissez-faire ideology as Coolidge.

* More than half of all Americans are living below a minimum subsistence level.

* Annual per-capita income is $750; for farm people, it is only $273.

* Backlog of business inventories grows three times larger than the year before. Public consumption markedly down.

* Freight carloads and manufacturing fall.

* Automobile sales decline by a third in the nine months before the crash.

* Construction down $2 billion since 1926.

* Recession begins in August, two months before the stock market crash. During this two month period, production will decline at an annual rate of 20 percent, wholesale prices at 7.5 percent, and personal income at 5 percent.

* Stock market crash begins October 24. Investors call October 29 "Black Tuesday." Losses for the month will total $16 billion, an astronomical sum in those days.

* Congress passes Agricultural Marketing Act to support farmers until they can get back on their feet.

1930

* By February, the Federal Reserve has cut the prime interest rate from 6 to 4 percent. Expands the money supply with a major purchase of U.S. securities. However, for the next year and a half, the Fed will add very little money to the shrinking economy. (At no time will it actually pull money out of the system.) Treasury Secretary Andrew Mellon announces that the Fed will stand by as the market works itself out: "Liquidate labor, liquidate stocks, liquidate real estate… values will be adjusted, and enterprising people will pick up the wreck from less-competent people." (More)

* The Smoot-Hawley Tariff passes on June 17. With imports forming only 6 percent of the GNP, the 40 percent tariffs work out to an effective tax of only 2.4 percent per citizen. Even this is compensated for by the fact that American businesses are no longer investing in Europe, but keeping their money stateside. The consensus of modern economists is that the tariff made only a minor contribution to the Great Depression in the U.S., but a major one in Europe. (More)

* The first bank panic occurs later this year; a public run on banks results in a wave of bankruptcies. Bank failures and deposit losses are responsible for the contracting money supply.

* Supreme Court rules that the monopoly U.S. Steel does not violate anti-trust laws as long as competition exists, no matter how negligible.

* Democrats gain in Congressional elections, but still do not have a majority.

* The GNP falls 9.4 percent from the year before. The unemployment rate climbs from 3.2 to 8.7 percent.

1931

* No major legislation is passed addressing the Depression.

* A second banking panic occurs in the spring.

* The GNP falls another 8.5 percent; unemployment rises to 15.9 percent.

1932

* This and the next year are the worst years of the Great Depression. For 1932, GNP falls a record 13.4 percent; unemployment rises to 23.6 percent.

* Industrial stocks have lost 80 percent of their value since 1930.

* 10,000 banks have failed since 1929, or 40 percent of the 1929 total.

* About $2 billion in deposits have been lost since 1929.

* Money supply has contracted 31 percent since 1929.

* GNP has also fallen 31 percent since 1929.

* Over 13 million Americans have lost their jobs since 1929.

* Capital growth investments have dropped from $16.2 billion to 1/3 of one billion since 1929.

* Farm prices have fallen 53 percent since 1929.

* International trade has fallen by two-thirds since 1929.

* The Fed makes its first major expansion of the money supply since February 1930.

* Congress creates the Reconstruction Finance Corporation. (More)

* Congress passes the Federal Home Loan Bank Act and the Glass-Steagall Act of 1932. (More)

* Top tax rate is raised from 25 to 63 percent.

* Popular opinion considers Hoover's measures too little too late. Franklin Roosevelt easily defeats Hoover in the fall election. Democrats win control of Congress.

* At his Democratic presidential nomination, Roosevelt says: "I pledge you, I pledge myself, to a new deal for the American people."

1933

* Roosevelt inaugurated; begins "First 100 Days" of intensive legislative activity. (More)

* A third banking panic occurs in March. Roosevelt declares a Bank Holiday; closes financial institutions to stop a run on banks.

* Alarmed by Roosevelt's plan to redistribute wealth from the rich to the poor, a group of millionaire businessmen, led by the Du Pont and J.P. Morgan empires, plans to overthrow Roosevelt with a military coup and install a fascist government. The businessmen try to recruit General Smedley Butler, promising him an army of 500,000, unlimited financial backing and generous media spin control. The plot is foiled when Butler reports it to Congress. (More)

* Congress authorizes creation of the Agricultural Adjustment Administration, the Civilian Conservation Corps, the Farm Credit Administration, the Federal Deposit Insurance Corporation, the Federal Emergency Relief Administration, the National Recovery Administration, the Public Works Administration and the Tennessee Valley Authority. (More)

* Congress passes the Emergency Banking Bill, the Glass-Steagall Act of 1933, the Farm Credit Act, the National Industrial Recovery Act and the Truth-in-Securities Act. (More)

* U.S. goes off the gold standard.

* Roosevelt does much to redistribute wealth from the rich to the poor, but is obsessed with a balanced budget. He later rejects Keynes' advice to begin heavy deficit spending.

* The free fall of the GNP is significantly slowed; it dips only 2.1 percent this year. Unemployment rises slightly, to 24.9 percent.

1934

* Congress authorizes creation of the Federal Communications Commission, the National Mediation Board and the Securities and Exchange Commission. (More)

* Congress passes the Securities and Exchange Act and the Trade Agreement Act. (More)

* The economy turns around: GNP rises 7.7 percent, and unemployment falls to 21.7 percent. A long road to recovery begins.

* Sweden becomes the first nation to recover fully from the Great Depression. It has followed a policy of Keynesian deficit spending. (More)

1935

* The Supreme Court declares the National Recovery Administration to be unconstitutional.

* Congress authorizes creation of the Works Progress Administration, the National Labor Relations Board and the Rural Electrification Administration. (More)

* Congress passes the Banking Act of 1935, the Emergency Relief Appropriation Act, the National Labor Relations Act, and the Social Security Act. (More)

* Economic recovery continues: the GNP grows another 8.1 percent, and unemployment falls to 20.1 percent.

1936

* The Supreme Court declares part of the Agricultural Adjustment Act to be unconstitutional.

* In response, Congress passes the Soil Conservation and Domestic Allotment Act. (More)

* Top tax rate raised to 79 percent.

* Economic recovery continues: GNP grows a record 14.1 percent; unemployment falls to 16.9 percent.

* Germany becomes the second nation to recover fully from the Great Depression, through heavy deficit spending in preparation for war.

1937

* The Supreme Court declares the National Labor Relations Board to be unconstitutional.

* Roosevelt seeks to enlarge and therefore liberalize the Supreme Court. This attempt not only fails, but outrages the public.

* Economists attribute economic growth so far to heavy government spending that is somewhat deficit. Roosevelt, however, fears an unbalanced budget and cuts spending for 1937. That summer, the nation plunges into another recession. Despite this, the yearly GNP rises 5.0 percent, and unemployment falls to 14.3 percent.

1938

* Congress passes the Agricultural Adjustment Act of 1938 and the Fair Labor Standards Act. (More)

* No major New Deal legislation is passed after this date, due to Roosevelt's weakened political power.

* The year-long recession makes itself felt: the GNP falls 4.5 percent, and unemployment rises to 19.0 percent.

* Britain becomes the third nation to recover as it begins deficit spending in preparation for war.

1939

* GNP rises 7.9 percent; unemployment falls to 17.2 percent.

* The United States will begin emerging from the Depression as it borrows and spends $1 billion to build its armed forces. From 1939 to 1941, when the Japanese attack Pearl Harbor, U.S. manufacturing will have shot up a phenomenal 50 percent!

* The Depression is ending worldwide as nations prepare for the coming hostilities.

* World War II starts with Hitler's invasion of Poland.

1945

* Although the war is the largest tragedy in human history, the United States emerges as the world's only economic superpower. Deficit spending has resulted in a national debt 123 percent the size of the GDP. By contrast, in 1994, the $4.7 trillion national debt will be only 70 percent of the GDP!

* The top tax rate is 91 percent. It will stay at least 88 percent until 1963, when it is lowered to 70 percent. During this time, America will experience the greatest economic boom it has ever known.

ECONOMIC TIMELINE

The following timeline shows the order of economic events during the Great Depression. Notice the effect that deficit spending had on economic growth:

Receipts: Tax receipts as a percentage of the Gross Domestic Product

Spending: Federal spending as a percentage of the Gross Domestic Product

GNP: Percent change in the Gross National Product

Unemp.: Unemployment rate

Tax Federal GNP Unemp.
Year Receipts Spending Growth Rate
-------------------------------------------------
1929 -- -- -- 3.2% < Hoover era, Great Depression begins
1930 4.2% 3.4% - 9.4% 8.7
1931 3.7 4.3 - 8.5 15.9
1932 2.9 7.0 -13.4 23.6
1933 3.5 8.1 - 2.1 24.9 < FDR, New Deal begins; contraction ends March
1934 4.9 10.8 + 7.7 21.7
1935 5.3 9.3 + 8.1 20.1
1936 5.1 10.6 +14.1 16.9
1937 6.2 8.7 + 5.0 14.3 < recession begins, May
1938 7.7 7.8 - 4.5 19.0 < recession ends, June
1939 7.2 10.4 + 7.9 17.2
1940 6.9 9.9
1941 7.7 12.1
1942 10.3 24.8
1943 13.7 44.8
1944 21.7 45.3
1945 21.3 43.7

As you can see, Roosevelt began relatively modest deficit spending that arrested the slide of the economy and resulted in some astonishing growth numbers. (Roosevelt's average growth of 5.2 percent during the Great Depression is even higher than Reagan's 3.7 percent growth during his so-called "Seven Fat Years!") When 1936 saw a phenomenal record of 14 percent growth, Roosevelt eased back on the deficit spending, overly worried about balancing the budget. But this only caused the economy to slip back into a recession, as the above chart shows.

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Sources:

T.H. Watkins, The Great Depression: America in the 1930s (New York: Little, Brown and Company, 1993)

Kevin Phillips, Boiling Point (New York: HarperCollins, 1993)

Kevin Phillips, The Politics of Rich and Poor (New York: Random House, 1990)

The 1995 Grolier Encyclopedia (Entries: New Deal, Depression of the 30s, Roosevelt, Coolidge.)

The Encyclopedia Brittanica Online (Entries: New Deal, Great Depression.)

Donald Barlett and James Steele, America: What Went Wrong? (Kansas City: Andrews and McMeel, 1992)

Donald Barlett and James Steele, America: Who Really Pays the Taxes? (New York: Simon & Schuster, 1994)

James MacGregor Fox, Roosevelt: The Lion and the Fox (New York: Konecky and Konecky, 1956)

Elaine Schwartz, Econ 101½ (New York: Avon Books, 1995)

Peter Pugh and Chris Garratt, Introducing Keynes (Cambridge, England: Icon Books, Ltd., 1993)

Paul Krugman, Peddling Prosperity (New York: W.W. Norton and Company, 1994)

Online sources:

History lecture notes: http://www.marshall.edu/history/mccarthy/hst331/lecture/greatdep.1

Gary H. Stern (President, Federal Reserve Bank of Minneapolis), "Achieving Economic Stability: Lessons From the Crash of 1929," 1987 Annual Report Essay, http://woodrow.mpls.frb.fed.us/pubs/ar/ar1987.html

Office of Management and Budget, Budget of the United States Government, Fiscal Year 1997, Historical Tables 1.2 and 10.1, http://www.doc.gov/BudgetFY97/histtoc.html

[L.A. BRONCOS FAN]

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[L.A. BRONCOS FAN]

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