Articles that interested me today

http://highline.huffingtonpost.com/articles/en/poor-millennials/

https://www.salon.com/2014/04/18/the_plot_to_overthrow_fdr_how_the_new_deal_sent_conservatives_into_a_rage_partner/

Was the New Deal the reason for 1950s prosperity?  Why do Republicans loathe social safety nets?

from HyperHistory:
Remedies 
The most famous remedy to overcome such economic paralysis was proposed by the English economist J. M. Keynes. 
Keynes maintained that government must  not be run like a business, because the rational thing for business to do in the midst of an economic downturn is to cut costs, but this is the worst thing to do from the point of view of the national economy as whole as it further reduces spending, resulting in a further spiral into decline. 
Instead Keynes proposed increased government spending for such things as relief payments and public works projects during a depression to get the economy rolling again. After a depression ends and prosperity returns deficit spending should then be reversed. 

The Roosevelt administration acted on this idea in an attempt to lift the United States out of the Great Depression of the 1930's. Roosevelt's 'New Deal' introduced certain features which automatically produced government deficits during a depression. The social security system, including unemployment insurance, and the income-tax system both are set up so that government revenues fall off while government expenditures increase as a depression gets under way. These features were called  built-in stabilizers.

Roosevelt began relatively modest deficit spending that arrested the slide of the economy and resulted in some astonishing growth numbers. (Roosevelt's average growth of 5.2 percent during the Great Depression is even higher than Reagan's 3.7 percent growth during his so-called 'Seven Fat Years!') When 1936 saw a phenomenal record of 14 percent growth, Roosevelt rejected Keynes' advice for heavy deficit spending, instead he eased back on the deficit spending, worried about balancing the budget. But this only caused the economy to slip back into a recession in 1938.

( Note: In 1934 Sweden followed a policy of Keynesian deficit spending and became the first nation to recover fully from the Great Depression )

In order to pay for the New Deal programs Roosevelt raised the top tax rate, and to finance the war economy the top tax rate was raised even more. It remained at 88 percent until 1963, by which time the entire war debt was payed down.
At that time the top tax rate could be lowered to 70 percent. During this period, America did experience the greatest economic boom it had ever known until that time. General income for everybody did raise dramatically. (Unlike the boom of the 1980's when middle class income stagnated but top incomes did raise sharply.)

In the 1980's a renewed scepticism of large-scale government intervention led once more to far reaching deregulations. Keynesian concepts got rejected and his warning about runaway money supply got dismissed.

In a repeat of the 1920's the top tax rate was lowered and the slogan became once again : 'Government is dumb, markets are smart'. The stock market saw again a spectacular rise and for a time the less regulated market forces led to considerable economic successes. (example: the hightech bubble in the 1990's). Blinded by success the money supply got even more increased by so-called derivatives - a development which alarmed some economists. But such warnings got curtly dismissed by most experts of the time as old-fashioned Keynesian politics.
(The legendary investor Warren Buffett called derivatives ' financial weapons of mass destruction.')

Towards the crisis of 2008

In contrast to Roosevelt's tax increases during World War II, the Bush administration tried to
' finance' the Iraq war with tax cuts resulting in a trillion dollar debt. Vice-President Cheney declared famously ' that deficits don't matter anymore'  At the same time the middle class income remained stagnant, which meant that people amassed huge credit debts in order to keep up their expected lifestyles - a situation that proved unsustainable in the long run.

The ideological split widens

As the U.S. Senate designed a bill to stimulate the economy it was revealed that most Democrats accept the Keynesian position that stimulus takes place by government spending replacing temporarely the spending that the private sector is not providing. But Republicans dislike Keynesian economics and think of stimulus more as tax cuts. Senator Mitch McConnell, Republican leader, says "we know for sure that the big spending programs of the New Deal did not work." What got the U.S. out of the Great Depression, he adds, "was the beginning of World War II."

Conveniently left out is the fact that the biggest stimulus ever was the U.S. government spending for the war economy. It was the war wich finally made the opponents of the New Deal accept large deficit spending - the resulting debt was completely payed down in 1963 on account of higher tax rates. (During this period, America did experience the greatest economic boom it had ever known until the oil shock of 1974)

Wow, this Hyper History author is awesome!