Big Government? Learning from the Past

As our new President takes office in the midst of the gravest economic crisis since the Great Depression, many Americans wonder whether government is the problem or the solution to our current woes. Two weeks ago, Barack Obama told an audience at George Mason University that "Only government can provide the short-term boost necessary to lift us from a recession this deep and severe. Only government can break the vicious cycles that are crippling our economy."

Obama's remarks contrast sharply with those of another incoming Chief Executive. On Inauguration Day, January 20, 1981, President Ronald Reagan spoke about an "economic affliction of great proportions" that confronted the United States. Echoing a theme he had delivered to conservative groups since the mid-1950s, the new Chief Executive told a worried nation that, "In this present crisis, government is not the solution to our problem; government is the problem."

Which man is right? Since the founding of the republic in 1776, politicians have debated whether it is better to promote the welfare of citizens through a strong central government that would act on behalf of all Americans, or, whether government involvement should be reduced to a minimum in order to allow citizens the opportunity to fashion their own destiny.

Different times call for different measures, but if history is any judge, the answer is clear: in times of severe crisis, Americans have consistently turned to a strong central government to effect solutions. And each time, the government has responded admirably. Ironically, the moment the crisis was over, the debate between those urging strong or weak central government resumed once again as though nothing had happened.

Let's look back in time to see what we can learn from the past. The first major expansion of the federal government occurred during the Civil War when President Abraham Lincoln had to mobilize from scratch an army of over a million soldiers and government employees. Only a strong central government, he reasoned, was capable of overseeing the draft, planning a nationwide war, and funding and then coordinating the efforts of private industry to provide food, clothing, ammunition, and transportation for military personnel. To that end, Lincoln greatly expanded the number of civilian employees in the federal government and increased federal spending by 1900% between 1861 and 1865. In order to pay for the war, he instituted the first income tax on individual incomes. When the conflict ended, a relative decline in the growth of federal bureaucracy followed, and an eventual return to older policies of laissez-faire central government.

American entry into World War I in April 1917 posed a similar crisis. Like Lincoln, President Woodrow Wilson greatly expanded the powers of the federal government in order to fight an international war that posed far greater logistical problems than the Civil War. In order to coordinate the activities of troops on two continents, he created a number of government agencies to manage domestic and foreign affairs. "The planning and regulation established during the war," noted historian William Leuchtenburg, "provided a pattern for coping with emergencies as well as an orientation generally toward planning for the nation's problems." The election of Republican Warren Harding in 1920 signaled an end to expansive government and return to a more minimal role for Washington, D.C.

The stock market crash of October 1929 and onset of the Great Depression produced yet another daunting crisis for the nation's political leaders. President Herbert Hoover hesitated using the power of the federal government to solve the nation's woes. By the time he founded the Reconstruction Finance Corporation in 1932 and gave $2 billion in loans, mostly to financial institutions, to keep them from going bankrupt it was too late.

Upon assuming office on March 4, 1933, Franklin Delano Roosevelt quickly rejected twelve years of Republican abhorrence to direct federal participation in the economy. As he stated in his inaugural address, "This Nation asks for action, and action now." And act he did. Over the next 100 days, he unveiled an unprecedented number of federal programs aimed at helping virtually every sector of the American economy and population. Insisting that "Our greatest primary task is to put people to work," FDR's first move was to insure passage of the Federal Emergency Relief Act (FERA) in May 1933, a measure that provided states with $500 million in direct relief. Instead of hand outs, the federal government gave people jobs. By January 1934, the Civil Works Administration, just one part of FERA, employed 4.2 million workers who built or repaired 500,000 miles of roads, 40,000 schools, and 3,500 playgrounds and athletic fields.

The New Deal fundamentally altered the role of the federal government as Americans began to look to Washington, not to local or state bodies, to address the country's economic problems. Under FDR, power shifted from the Legislature to the Executive branch as the President, not Congress, emerged as the primary initiator of policy.

In a January 1961 speech to the Young Republicans, Ronald Reagan warned that liberals had one thing in common with "Socialists and Communists--they all want to settle their problems by government action." As Congress debates the merits of the President's economic stimulus plan, citizens and political leaders would do well to ignore Reagan and follow the lead of those--like Lincoln, Wilson, FDR, and now Obama--who clearly saw government as holding the best chance for solving the complex problems of their times. Calling for strong federal action in times of crisis is not a question of being liberal or conservative, but of common sense. Harkening back to 18th century ideals of true citizenship, Obama recently implored "all Americans--Democrats and Republicans--to put good ideas ahead of the old ideological battles; a sense of common purpose above the same narrow partisanship; and insist that the first question each of us asks isn't 'What's good for me?' but 'What's good for the country my children will inherit?'" Hopefully, those inside the Beltway who have contributed to our current mess will listen and fashion a reenergized government that offers new policies for a deeply troubled nation. They have only to look at history to know that imaginative government is not the problem but the solution to our problems.

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