The Great Teacher

Robert Borosage

Government is the great teacher of its people, by what it does and by what its leaders say. And no one has a larger pulpit than the President, as Barack Obama showed yesterday, when he summoned the media to broadcast comments as markets tanked across the world.

The president chose his subject: deficit reduction. He chose his theme: that more cuts were needed, that it was time to get on with tax hikes and cuts in “medical programs like Medicare.” That we should have confidence that the “super committee” of 12 legislators created in the debt ceiling debacle could reach an agreement. All that was needed was political will. And an agreement will allow us to sustain what little help we are providing to the economy — extend the payroll tax break, extend unemployment insurance, spend a little on infrastructure.

He used the moment to teach Americans that reducing the deficit, cuts in spending on Medicare and increases in revenue (not increases in tax rates which seem to be off the table) are of primary importance.

Meanwhile, 25 million Americans are in need of full time work. The stock market is tanking because the recovery looks still born, Europe is plummeting into another financial crisis, the world economy is slowing. Companies are sitting on trillions, millions of able workers are idle, growing needs go unmet, and the President is teaching us about the need for more cuts, more constriction, more austerity.

The contrast, I realize, is trite by this time, but still telling. Another president with an economy mired in depression, realizes he’s made a mistake by moving pre-maturely to deficit reduction, and uses his pulpit — at that time the radio — to teach the American people. Here is Franklin Roosevelt in April of 1938. It is a long quote, but only an excerpt of the address he delivered. Americans were less educated but more thoughtful at the time:

Thus, from our earliest days we have had a tradition of substantial government help to our system of private enterprise. But today the Government no longer has vast tracts of rich land to give away and we have discovered, too, that we must spend large sums of money to conserve our land from further erosion and our forests from further depletion. The situation is also very different from the old days, because now we have plenty of capital, banks and insurance companies loaded with idle money; plenty of industrial productive capacity and many millions of workers looking for jobs. It is following tradition as well as necessity, if Government strives to put idle money and idle men to work, to increase our public wealth and to build up the health and strength of the people –to help our system of private enterprise to function again.

It is going to cost something to get out of this recession this way but the profit of getting out of it will pay for the cost several times over. Lost working time is lost money. Every day that a workman is unemployed, or a machine is unused, or a business organization is marking time, it is a loss to the Nation. Because of idle men and idle machines this Nation lost one hundred billion dollars between 1929 and the Spring of 1933, in less than four years. This year you, the people of this country, are making about twelve billion dollars less than you were last year.

If you think back to the experiences of the early years of this Administration you will remember the doubts and fears expressed about the rising expenses of Government. But to the surprise of the doubters, as we proceeded to carry on the program which included Public Works and Work Relief, the country grew richer instead of poorer.

It is worthwhile to remember that the annual national people’s income was thirty billion dollars more last year in 1937 than it was in 1932. It is true that the national debt increased sixteen billion dollars, but remember that in that increase must be included several billion dollars worth of assets which eventually will reduce that debt and that many billion dollars of permanent public improvements — schools, roads, bridges, tunnels, public buildings, parks and a host of other things meet your eye in every one of the thirty-one hundred counties in the United States.

No doubt you will be told that the Government spending program of the past five years did not cause the increase in our national income. They will tell you that business revived because of private spending and investment. That is true in part, for the Government spent only a small part of the total. But that Government spending acted as a trigger, a trigger to set off private activity. That is why the total addition to our national production and national income has been so much greater than the contribution of the Government itself.

In pursuance of that thought I said to the Congress today:

“I want to make it clear that we do not believe that we can get an adequate rise in national income merely by investing, and lending or spending public funds. It is essential in our economy that private funds must be put to work and all of us recognize that such funds are entitled to a fair profit.”

As national income rises, “let us not forget that Government expenditures will go down and Government tax receipts will go up.”

The Government contribution of land that we once made to business was the land of all the people. And the Government contribution of money which we now make to business ultimately comes out of the labor of all the people. It is, therefore, only sound morality, as well as a sound distribution of buying power, that the benefits of the prosperity coming from this use of the money of all the people ought to be distributed among all the people — the people at the bottom as well as the people at the top. Consequently, I am again expressing my hope that the Congress will enact at this session a wage and hour bill putting a floor under industrial wages and a limit on working hours — to ensure a better distribution of our prosperity, a better distribution of available work, and a sounder distribution of buying power.

You may get all kinds of impressions in regard to the total cost of this new program, or in regard to the amount that will be added to the net national debt.

It is a big program. Last autumn in a sincere effort to bring Government expenditures and Government income into closer balance, the Budget I worked out called for sharp de creases in Government spending during the coming year.

But, in the light of present conditions, conditions of today, those estimates turned out to have been far too low. This new program adds two billion and sixty-two million dollars to direct Treasury expenditures and another nine hundred and fifty million dollars to Government loans — the latter sum, because they are loans, will come back to the Treasury in the future.

The net effect on the debt of the Government is this — between now and July 1, 1939 — fifteen months away — the Treasury will have to raise less than a billion and a half dollars of new money.

Such an addition to the net debt of the United States need not give concern to any citizen, for it will return to the people of the United States many times over in increased buying power and eventually in much greater Government tax receipts because of the increase in the citizen income.

What I said to the Congress today in the close of my message I repeat to you now.

“Let us unanimously recognize the fact that the Federal debt, whether it be twenty-five billions or forty billions, can only be paid if the Nation obtains a vastly increased citizen income. I repeat that if this citizen income can be raised to eighty billion dollars a year the national Government and the overwhelming majority of state and local governments will be definitely ‘out of the red.’ The higher the national income goes the faster will we be able to reduce the total of Federal and state and local debts. Viewed from every angle, today’s purchasing power -the citizens’ income of today — is not at this time sufficient to drive the economic system of America at higher speed. Responsibility of Government requires us at this time to supplement the normal processes and in so supplementing them to make sure that the addition is adequate. We must start again on a long steady upward incline in national income.”

“…And in that process, which I believe is ready to start, let us avoid the pitfalls of the past — the overproduction, the over-speculation, and indeed all the extremes which we did not succeed in avoiding in 1929. In all of this, Government cannot and should not act alone. Business must help. And I am sure business will help.”

“We need more than the materials of recovery. We need a united national will.”

“We need to recognize nationally that the demands of no group, however just, can be satisfied unless that group is prepared to share in finding a way to produce the income from which they and all other groups can be paid…You, as the Congress, I, as the President, must by virtue of our offices, seek the national good by preserving the balance between all groups and all sections.”

“We have at our disposal the national resources, the money, the skill of hand and head to raise our economic level — our citizens’ income. Our capacity is limited only by our ability to work together. What is needed is the will.”

“The time has come to bring that will into action with every driving force at our command. And I am determined to do my share.”

“…..Certain positive requirements seem to me to accompany the will — if we have that will.”

“There is placed on all of us the duty of self-restraint. That is the discipline of a democracy. Every patriotic citizen must say to himself or herself, that immoderate statement, appeals to prejudice, the creation of unkindness, are offenses not against an individual or individuals, but offenses against the whole population of the United States…
“Use of power by any group, however situated, to force its interest or to use its strategic position in order to receive more from the common fund than its contribution to the common fund justifies, is an attack against and not an aid to our national life.”

“Self-restraint implies restraint by articulate public opinion, trained to distinguish fact from falsehood, trained to believe that bitterness is never a useful instrument in public affairs. There can be no dictatorship by an individual or by a group in this Nation, save through division fostered by hate. Such division there must never be.”
And finally I should like to say a personal word to you.

I never forget that I live in a house owned by all the American people and that I have been given their trust.
I try always to remember that their deepest problems are human. I constantly talk with those who come to tell me their own points of view — with those who manage the great industries and financial institutions of the country –with those who represent the farmer and the worker — and often, very often with average citizens without high position who come to this house. And constantly I seek to look beyond the doors of the White House, beyond the officialdom of the National Capital, into the hopes and fears of men and women in their homes. I have travelled the country over many times. My friends, my enemies, my daily mail bring to me reports of what you are thinking and hoping. I want to be sure that neither battles nor burdens of office shall ever blind me to an intimate knowledge of the way the American people want to live and the simple purposes for which they put me here.

In these great problems of government I try not to forget that what really counts at the bottom of it all is that the men and women willing to work can have a decent job, — a decent job to take care of themselves and their homes and their children adequately; that the farmer, the factory worker, toe storekeeper, the gas station man, the manufacturer, the merchant — big and small — the banker who takes pride in the help that he can give to the building of his community — that all of these can be sure of a reasonable profit and safety for the earnings that they make — not for today nor tomorrow alone, but as far ahead as they can see.

I can hear your unspoken wonder as to where we are headed in this troubled world. I cannot expect all of the people to understand all of the people’s problems; but it is my job to try to understand all of the problems.

I always try to remember that reconciling differences cannot satisfy everyone completely. Because I do not expect too much, I am not disappointed. But I know that I must never give up — that I must never let the greater interest of all the people down, merely because that might be for the moment the easiest personal way out.

I believe that we have been right in the course we have charted. To abandon our purpose of building a greater, a more stable and a more tolerant America would be to miss the tide and perhaps to miss the port. I propose to sail ahead. I feel sure that your hopes and I feel sure that your help are with me. For to reach a port, we must sail — sail, not lie at anchor, sail, not drift.

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