An Old Deal

Paul Krugman, a Nobel-Prize winning economist, called today for a "new New Deal" to meet the challenge of the greatest financial crisis since the Great Depression.  Liberals generally are celebrating their return to power by planning an ambitious expansion of government.

Of course, the New Deal didn't work.  It did not end the Great Depression.  The economy continued to suffer throughout the 1930s, recovering only from the massive military buildup in 1940.

Not only did it not work, but the key New Deal program--Social Security--was so poorly designed that we are still wrestling with how to pay for all the promises our grandparents made eighty years ago.

"But the New Deal gave people hope," say its defenders.  Which is another way of saying that the New Deal made people feel good.  That was the New Deal's true legacy:  teaching Americans to look to government to make them feel better.  In the absence of a meaningful impact on the devastated economy, liberals defend the New Deal as national therapy.  

Now we have calls for a new New Deal.  Americans feels bad--understandably so.  But a call for a new New Deal is a call to spend $1 trillion for therapy and pass the bill to future generations.