Hoover Never Practised Austerity
Re: Harper denies focusing on austerity, Sept. 28.
Wherever did some Canadian economists get the strange idea that U.S. President Herbert Hoover "helped plunge his country into the Great Depression through austerity measures"? Hoover never practised austerity; His government dramatically increased government spending. Federal spending rose from three per cent of the U.S. economy in 1929, the year he took office, to eight per cent in 1933, the year he left office. The nation's budget deficit became so huge as a result that by 1932, it was spending more than two dollars for every dollar it took in. It was not austerity that deepened the Great Depression, but other measures backed by President Hoover, like the Smoot-Hawley Tariff of 1930. That increased tariff triggered trade wars between the U.S. and other countries that wiped out millions of jobs.