Even in normal times, San Francisco and Seattle go to great lengths to make life hard for families. Both cities, with governments dominated by cryptosocialists, are notorious for enacting policies that raise the price of housing, drive out jobs and punish innovative companies in ways that hurt workers. With the Seattle area as a whole becoming more radical on economics by the year, it seems foolish to hope that the situation will improve for my company’s workers and their families.
Why, despite the New Deal, didn’t government spending—and federal government spending in particular—grow more than it did? And why was the growth of federal deficit spending even more modest?
The answer to both questions is that, despite frequent claims to the contrary, the New Deal did not usher in a Keynesian fiscal revolution, or anything close. Instead, as Julian Keliser (p. 125) remarks in his brilliant essay on the subject, “fiscal conservatism…remained normative for most of the New Deal.” FDR himself held fairly orthodox views about fiscal policy, and he made a point of picking Treasury secretaries whose views were even more orthodox. The chairs of almost all the key Senate and House committees, mostly southern Democrats, were also fiscal conservatives, as were some progressive Democratic representatives. Only after 1938, when the economy had been laid low by the 1937-8 depression and the New Deal was drawing to a close, did the Roosevelt administration finally abandon its commitment to limited spending and a balanced budget.