Lately economic news has suggested that the dreaded double dip in the economy may be upon us. The talking heads at CNBC have been talking up a double dip for months if not years; their dream/fear may be finally coming true.
The Republican victory last November essentially killed any notion that the government might be able to continue to stimulate the economy until it gets on more solid footing. After getting their rich constituents a nice slice of their favorite form of government handout: a juicy tax cut extension, the Republican’s have been able to keep up a steady drumbeat about the deficit and the need to suppress the economy through spending cuts.
George Santayana famously said, “Those who cannot remember the past are condemned to repeat it.” It was only by remembering the Great Depression that this country was able to respond to the recent Great Recession and limit its carnage. Unfortunately, we have recently either forgotten our history or worse.
Back in 1937, there were signs that the nation was recovering from the Great Depression. President Roosevelt decided it was time to get the debt problem under control. His advisers told him he needed to cut spending from his stimulus programs. He agreed, and the result was the Recession of 1937-1938.
I would like to think that the clamor for spending cuts today simply reflects a general ignorance about history. Yet the more cynical side of me realizes that these cuts are being urged by some on the right who certainly know all about what happened in 1937. I then have to wonder whether the Republican cries for spending cuts are motivated precisely because they know their history and they hope to send the economy into a double dip. After all, a double dip is their best hope for regaining the White House in 2012. As the New York Times reports, “No American president since Franklin Delano Roosevelt has won a second term in office when the unemployment rate on Election Day topped 7.2 percent.”