Do Deficits and the Debt Matter?

The deficit debate has been brewing for decades. Notably, it was the thirty-second U.S. president, Franklin D. Roosevelt, who was against hiking deficits. FDR was a four-term president (1933–1945), elected in November 1932, in the midst of the devastating Great Depression. During his presidency, FDR instituted Social Security, welfare reforms, new banking controls, and New Deal programs. FDR did incur modest deficits in an attempt to restore the economy and assist the unemployed. However, “FDR refused to run up the deficits that ending the depression required,” according to the Eleanor Roosevelt Papers. Early efforts did bring recovery to output, but “only when the federal government imposed rationing, recruited 6 million defense workers (including women and African- Americans), drafted 6 million soldiers, and ran massive deficits to fight World War II, did the Great Depression finally end.”