How Franklin D. Roosevelt Botched Social Security

by ALAN NASSER

 

The seeds of neoliberal economic policy were planted during the founding years of twentieth century liberalism. The Democrats’ current embrace of  fiscal conservatism is claimed by contemporary self-proclaimed New Dealers to be a repudiation of the founding bequest, a capitulation to reactionary Republican dogma. Budget deficits, we are told, were legitimated by Franklin D. Roosevelt during the New Deal as a legacy to future Democratic regimes. The political obligation to enhance social welfare is supposed to have trumped the old-time Hooverian taboo against government expenditures beyond government receipts.

Objections to this policy are thought to have been refuted not merely by Keynesian economic theory but mainly by successful practice: once Roosevelt put into place large scale deficit-funded projects like the Works Progress Administration, the economy was launched into its steepest cyclical expansion to this day, from 1933 to 1937.  Reagan’s tirades against budget deficits are said to be a throwback to pre-Rooseveltian times and outdated orthodoxy. Imagine the chagrin of  “the Democratic wing of the Democratic Party” when Clinton and Obama betrayed the heritage of the New Deal by seconding the Republican commitment to fiscal orthodoxy. The rustling sound you are supposed to hear is FDR tossing in his grave.