As we listen to the debate over the debt ceiling, government spending and an impossible-to-pass-by-Tuesday Balanced Budget Amendment, I am reminded of the phrase “those who forget history are condemned to repeat it.
Turn the clocks back to 1937. This nation was in he midst of the Great Depression. Unemployment was much higher than it is today. President Franklin D. Roosevelt, facing a budget that carried a small amount of deficit spending, cut government spending to balance the books. The results were a disaster and “The Roosevelt Recession” sunk the economy before it could fully recover.
The underlying cause of the recession was that business confidence eroded due to a lack of government spending. Now if Congress fails to compromise on a new plan and our credit rating falls, the Republican leadership will have – in effect – raised taxes for everyone due to higher interest rates.
Should Congress fail to act, the president is within his right to invoke the 14th amendment to lead us out of this quagmire.