Hoover's Deficit Spending

Hoover's Deficit Spending

Letter to the Editor in the Washington Post
April 07, 2009
Originally published in The Washington Post

William Hettinger [letters, April 3] rewrote history by falsely claiming that “President Herbert Hoover’s response” to the 1929 stockmarket crash “was to balance the federal budget.” Hoover actually ranup massive deficits, as the federal Office of Management and Budgetnotes.

Hoover inherited a large budget surplus, which hequickly turned into a deficit. By 1932, when he lost his bid forreelection, the deficit had reached $2.7 billion—the third-largestbudget deficit America had ever experienced. Hoover increasedgovernment spending from $3.1 billion to $4.7 billion in a failedeffort to stimulate the economy. And he increased marginal tax rates to63 percent.

Mr. Hettinger claimed that “economists of allstripes” agree with him that a balanced budget “helped bring on theGreat Depression.” None of the economists I know—liberal orconservative—believe this.

HANS BADER

Counsel
Competitive Enterprise Institute