Spending vs. Economy: A Ten-Year Record

March 1, 1940

Report Outline
Government Spending as a Political Issue
Expenditure and Revenue, 1931–1940
Expansion of Federal Government Functions
Special Focus

Government Spending as a Political Issue

The 1940 presidential nominating conventions will meet at the close of ten fiscal years of uninterrupted federal deficits. The Republicans have already indicated that they will make government spending a major issue in the ensuing campaign: on February 19 the Republican Program Committee declared that the present administration has increased federal government expenditures by more than 138 per cent in seven years, and recommended a 20 per cent reduction from the present level, with the object of achieving a balanced budget in 1942.

The Democratic party is sharply divided on the spending issue. Conservative Democrats have often urged economy as strongly as the Republicans, while the more extreme New Dealers have advocated large expenditures and deficit financing with the deliberate aim of pumping new money into the economic system. Neither of these economic philosophies has been supported consistently. The administration and New Deal leaders in Congress have sometimes urged drastic curtailment of appropriations, while conservative Democrats and Republicans have often approved heavy increases in expenditures, particularly for relief, farm benefits, and national defense.

The issue of spending vs. economy has, however, been more clearly drawn during the present session of Congress than in previous years. President Roosevelt stated the New Deal policy in his budget message of January 4, 1940:

ISSUE TRACKER for Related Reports
Budget and the Economy
Deficit, Federal Debt, and Balanced Budget