NTU Vice President of Government Affairs Andrew Moylanjoined Thom Hartmann on his RTV program this Tuesday to discuss budget policyin light of the payroll tax cut extension. The debate was heated, and there ismore to the discussion than could be contained in the segment.
Hartmann noted that at the end of World War II, debtwas equal to 122 percent of the nation’s GDP. By 1970, debt declined to 38percent of GDP. Hartman claims this was achieved by borrowing more money andfueling the economy the Keynesian way.
In addition to Andrew’s arguments made on the show,there are some additional points to keep in mind:
Federal spending drastically dropped after World War2, down from 43.6% of GDP in 1944 to 11.6% in 1948. Those concerned that suchreductions would lead to disaster show were wrong as the economy boomed.
Spending is currently at22 percent of GDP. This year we are expected to face debt equaling nearly 100percent of GDP according to the Office of Budget and Management.
Heeding these historicalexamples that Mr. Hartmann is failing to comprehend should encourage seriousspending restraint and budgetary discipline.