Monday, July 18, 2011

The Spending Facts of Pres. Hoover

For those of you who are confused Keynesians:

According to the historical tables of the Office of Management and Budget, spending in 1929 was $3.1 billion, up from $2.9 billion the year before. In 1930 it was $3.3 billion. In 1931, Hoover raised spending to $3.6 billion. And in 1932, he opened the taps to $4.7 billion, where it basically stayed into 1933 (most of which was a Hoover budget). As a percentage of GDP, spending rose from 3.4% in 1930 to 8% in 1933--an increase larger than the increase under FDR, though of course thankfully under FDR, the denominator (GDP) had stopped shrinking.

“This spending represented a substantial increase over the Coolidge years (outlays had been steady between $2.85 billion and $2.95 billion since 1924). And in real terms they represented a very substantial increase, since both nominal and real GDP were falling.” --McArdle cited at Examiner

Granted, it's hard to relate to micro-numbers like "$3.3 billion" as a Fed budget....but still.


J. Strupp said...

I read this awhile ago. This says nothing about the nature of spending Hoover enacted. So he modestly increased spending some years after the total collapse of the labor market. Yeah.

And, as McArdle says, using debt/GDP numbers during this time period is deceiving to say the least.

Dad29 said...


A sixty-percent increase over 3 years is "modest."

You're blustering. I know, because I've had to do it.

Just concede that the Depression was NOT "furthered" by Hoover--a social engineer--and was NOT "rescued" by FDR until he lied and cheated us into a war to save his ass.

J. Strupp said...

"A sixty-percent increase over 3 years is "modest."

No, slightly less than 10% increase in 1931 and then a 60% increase once unemployment had already risen to over 25% the economy had collapsed.

"Just concede that the Depression was NOT "furthered" by Hoover--a social engineer--"

And monetary policy Dadster? Hoover and Mellon insisting on maintaining the gold standard even as the deflationary spiral took hold in the early 30's? How was the depression not
"furthered" by this horrendous policy.

"and was NOT "rescued" by FDR..."

GDP growth from 1932-36 averaged a bit under 10% and slightly less than that from 1938-1945 (I don't count the GOP balance budget policy of the '37-'38 recession within the depression. That was GOP policy not FDR's). The labor market responded accordingly as well. I'll be happy to post data on this time period if you want but you already know it because I've done so before.

"...until he lied and cheated us into a war to save his ass."

WTF? Sorry I got nothin'. FDR lied and cheated his way into letting the Japanese occupy east Asia, bombing Pearl Harbor and German's occupy all of Europe. I think you should write more about this theory on your blog. I'm sure the response will be positive.

Anonymous said...

Dad29's last statement regarding FDR and WWII is to maintain his street cred with the tin-foil hat club.

J. Strupp said...

I can't cliam to take credit for this one Dadster but here you go:

Soldiers Bonus ACT of 1924. Delong has been harping on the passage of this ACT in 1931 for a couple of weeks now. What I didn't realize was the Soldiers ACT of 1924 (passed in '31) was passed through Congress, vetoed by Hoover and then overridden by Congress to become law.

The total cost of the Soldiers ACT in 1931-32? About a billion dollars or pretty much ALL of the increase in spending by the Hoover Administration in 31-32.

So as Delong asks, does Hoover get to take credit for increasing spending if he vetoes a bill that gets overridden by Congress to become law that constitutes almost the entire increase in the budget during that time period?