Thursday, May 28, 2015

Who said it when?

Ok MMT fans, lets play a game of "who said it, when". What follows is two paragraphs of text relating to government spending and the national 'debt'. As you read it, try to guess who the speaker is, and around what year it was said:

"As far as I can learn, this money, which belongs to the wage earners, is not earmarked but is used for the running expenses of the Federal Government.  It is a serious question whether these payments, made in good faith for a specific purpose – that is, for social security and old-age pensions, and so forth – should be used for any other purpose.  The whole question comes down to the credit of the Government.  If the credit of the Government is sound – and I do not question it at the present time, but none of us can anticipate what it may be in the years to come.  However, if the national debt is to increase a billion or two each year, if we are to pile deficit upon deficit, if we are to continue to issue tax-exempt securities by the billions, sooner or later the credit of the United States will be impaired.  Then the funds of these wage earners will also be impaired, when social-security benefits as well as old-age pensions and railroad retirement are to be paid from Government income.

As I said yesterday, I place the interest of my country and its welfare above all partisanship.  I do not want to see the Government’s credit impaired or broken down for any partisan advantage, but everyone knows if we continue the present financial program of borrowing billions upon billions of dollars, with an unbalanced Budget, piling up debt upon debt, sooner or later the day of reckoning will come. None of us are prophets.  We cannot predict when that time will be.  All we know is that is we continue on this road, with no financial policy and an unbalanced Budget we are going forward on the road to bankruptcy, repudiation, and financial chaos. "

So who do you think said this, and when? 

A) Alan Simpson in 2010

B) Peter Schiff in 2005

C) Pete Peterson in 1993

D) Ronald Reagan in 1987

If you guessed A,B,C, or D, guess what, you'd be WRONG! That's because this statement, which sounds exactly like what the debt doomsday crowd has been saying over the past few years, was actually spoken on the floor of the US House by Representative Hamilton Fish III, in November 1937! Thats right, nearly 80 years ago. As you may know, 1937 was the year the Roosevelt administration embraced austerity by raising taxes and cutting spending on New Deal programs, which resulted in the recession-within-depression of 1937. A few years later, spending on WWII would begin, adding several times more to the national 'debt', with no consequences. One can only hope Marriner Eccles gave this man a severe rhetorical beat-down soon afterwards. 

Goes to show- Same Shit, Different Millennium


Roger Erickson said...

Classic comment, Justin.

Steve said...

Thanks Justin.