I am not a student of history. How were the Depression era jobs and other programs paid for? Borrowing like now?
Depends on what stage of the Great Depression we're talking about. The government's policies were at best uneven, and at worst erratic and contradictory.
FDR was not, at first, keen on Keynesian theory. (
I remember reading a quote from FDR after he first met Keynes that was somewhat derogatory, something like he thought Keynes was an over technical egghead who threw too many numbers around.) In fact, at first, he was heavily invested in having a balanced budget, something that was a Democratic Party platform plank in that era. Eventually, when the Depression within the Depression came along, FDR completely reversed himself on balancing the budget and created a deficit budget.
Well, actually that's not completely accurate. FDR, at one point while espousing a balanced budget, was in reality keeping
two sets of books. There was the
official budget, and then there was the emergency budget. The first was balanced and the second was used to fund all of the different agencies and programs, like the RA, WPA, CCC, etc., that were experimental.
But your question indicates to me, that you think, as I once did, that the government spent its way out of the Great Depression.
Most people think of the New Deal in terms of the WPA and CCC and millions of Americans working on government jobs. That all of that somehow stimulated the economy and created more jobs in private industry. Then WWII came along and deficit wartime budgets sent everything into overdrive. The reality is that government programs employed
some people, but there were still millions of people out of work. At the height of the WPA the nation's unemployment rate was still 15-20%.
What doesn't get as much attention in the average high school or college history text are the details of government policy.
Much of what the government did during the Great Depression actually delayed recovery. And it wasn't how much the government was spending, or not spending, it was the policies and regulations created. Punitive taxation, thousands of regulatory practices that ranged from common sense to insane (they prosecuted and jailed some Kosher butchers in New York for letting customers choose which chicken they wanted to buy), to prosecuting wealthy taxpayers for maximizing deductions within the law.
Gold policy? FDR once set the price for gold based on what he thought was "a lucky number".
His own head of the Treasury once pleaded with him to stop screwing around with the markets before he destroyed the bond market. Roosevelt told Henry Morgenthau that he was hoping for some breathing room and that might mean the bond markets would falter for a few months. Mogenthau told him the reality was that a few months "breathing room" for FDR actually meant years of delay for the economic recovery. FDR later came back and said he was "just kidding", but Morgenthau wrote in his memoirs that he thought FDR had been serious and that it was his arguments that had persuaded the change.
Morgenthau was not Keynesian by any stretch of the imagination, but he was a supporter of FDR and a close friend of he and his wife. However, he did testify before Congress near the end of the GD that all of the spending had accomplished nothing other than putting the government deeply into debt. He basically said that unemployment had not improved and all of the government programs had failed to live up to their potential.
And my concerns for what is happening today mirror Morgenthau's sentiments in the 1930's. The government is spending money like a drunk sailor on leave, increasingly to score political points rather than solve the problems, and the policies are contradictory, confusing, and increasingly nonsensical.
Policy created today has the potential to come back and haunt us for decades. I can't find the quote now, but when FDR was talking with his advisers about creating Social Security, his main concern was the possibility that it would get out of control and create a huge deficit for future generations. The quote was prescient, something along the lines of: "It would be just as disastrous to create a deficit for the government of 1933 as it would be for the government of 1983". The hole we are digging today has the potential to make the SS hole like like a pothole next to the Grand Canyon.
