Descent and Deficit
The New Deal, whether by way of excuse or conviction, embraced the doctrine of deficit financing. Deficit financing, for many of the New Deal, was not simply accepted as a necessary evil, but became, at such a time, a normal instrument of public policy. Herbert Hoover incurred deficits mainly from falling revenues; Roosevelt was to experience rising revenues, but had deficits because his expenditures mounted yet higher. The budget message of January, 1938, declared that deficits must be reduced, since the income of the government was so high. The New Deal, whether by way of excuse or conviction, embraced the doctrine of deficit financing. In sketching the fiscal operations of the New Deal it is useless to try to compare depression public finance under Hoover and under Roosevelt, for the two periods was different in duration and in policies. The old broken homeopathic doses of the New Deal had been disapproved as slow and debatable in effect.