. Government employment, not counting those employed in works-relief projects, increased by seventy-three percent from 1930 to 1940. 2,892,000 Americans worked at one time or another in the various recovery projects. The Federal budget grew from $3.44 billion in 1930 to $9.06 billion by 1940, a nearly threefold increase (Collins, 1981, p. 1).
In fact, however, the role of Keynes and his ideas as a driving force behind the New Deal is vastly less clearcut. It might be more accurate to say that the influence went the other way; that both the successes and the shortcomings of the New Deal were instrumental in paving the way for public acceptance of Keynes. Americans at the time did not regard the New Deal as a Keynesian experiment. One extensive account of the American effort to deal with the Great Depression, published in 1936, mentions Keynes only twice in nearly 550 pages of text, both times in footnotes (Moulton, et al, 1972, pp. 360; 450). In the remainder of this essay, we will enquire into the nature of the relationship between Keynesian theory and New Deal policies.
Fiscal policy has become closely associated with the thirties; John Maynard Keynes's General Theory of Employment, Interest and Money was published in 1936. But Keynesian ideas were at most on the very fringes of the political debate. The idea of spending to spur recovery was a common one, yet few held it to be the answer to depression. Indeed, most spenders simultaneously espoused other programs which they regarded as more "fundamental" than mere "pump priming." (Rosonof, 1975, p. 54)
When Franklin D. Roosevelt came into office in 1933, his original economic program was thoroughly orthodox. He had campaigned on a platform of government spending cuts and a balanced budget. "'Too often in recent history,' he warned, 'liberal governments have been wrecked on rocks of loose fiscal policy. We must avoid this danger'" (Collins, 1981, p. 3). Once in ...