Here’s a letter to the Washington Post:
Harold Meyerson writes that Herbert Hoover “cut spending” in order to bring the government’s budget “into balance” (“Sequestration stupidity,” Feb. 27). Mr. Meyerson is spectacularly wrong on both counts.
U.S. government spending rose during every year of Hoover’s administration. In 1932, Hoover’s last full year in office, nominal spending was 52 percent higher than it was in 1929, the year he took office.* Given that these years were ones of deflation, the increase in real spending was even larger. And as for balancing the budget, by 1932 Uncle Sam’s budget deficit, at $2.7 billion, was 4 percent of GDP – then the third-largest budget deficit in U.S. history.**
Fiction is not made into fact by incessant repetition.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
* See here.
Harold Meyerson’s Feb. 27 op-ed column, “The perils of austerity,” claimed that President Herbert Hoover cut spending. Hoover actually increased nominal spending by 48 percent in just four years. When he took office, the federal budget was $3.1 billion. His last budget, fiscal 1933, was $4.6 billion. Since there was roughly 10 percent annual deflation during that time, Hoover doubled federal spending in real terms. Even inside the Beltway, that does not qualify as a cut, let alone austerity. Mr. Meyerson should look elsewhere for arguments against sequestration.
Ryan Young, Washington
The writer is a fellow at the Competitive Enterprise Institute.
The astute reader will note that Ryan’s numbers on the nominal-spending increase under Hoover are not slightly different than the ones I use. I use as the final year of Hoover’s spending 1932; Ryan uses 1933 – and spending in 1933 was indeed about $100 million lower than it was in 1932. I have no idea how much of this decline (in nominal terms, for the deflation of the era meant that there was no decline in real spending at all) was due to any effort by Hoover to change the course of his presidency at the last minute to ‘cut’ spending and how much was due to FDR’s policies. FDR did, after all, take office on March 4, 1933 after having explicitly campaigned against Hoover’s careless deficit-spending policies. (I do think, as I ponder the matter further, that the more-appropriate year to use for Hoover’s last year in office is not 1932 but 1933.) Either way, there is no remotely plausible tale to be told in which Herbert Hoover can be described as having cut spending in order to balance Uncle Sam’s budget.