Changes

All during the winter and spring of 1938 a group of young instructors from Harvard and Tufts were busy on a book which they called ''An Economic Program for American Democracy.'' which  appeared in October, 1938. These instructors had been moving under the guidance of Dr. Alvin H. Hansen,<ref>Alvin H. Hansen, ''Fiscal Policy and Business Cycles'', (Norton, 1941).</ref> The theory propounded may be briefly stated thus: The expansion of the American economy came to an end in 1929. Before that it had grown for several well-known reasons. (1) There was a rapid increase in population due to free immigration. (2) The frontier was open to entry and exploitation. (3) Technological expansion went forward upon an amazing scale. But all this came an end. Population is no longer increasing save at a small rate. The frontier is gone, having been exploited and settled. Technological advance at the old rate is no longer possible—the great era of revolutionary inventions is over. A basic change had come over the structure of the American economy.

All during the winter and spring of 1938 a group of young instructors from Harvard and Tufts were busy on a book which they called ''An Economic Program for American Democracy.'' which  appeared in October, 1938. These instructors had been moving under the guidance of Dr. Alvin H. Hansen,<ref>Alvin H. Hansen, ''Fiscal Policy and Business Cycles'', (Norton, 1941).</ref> The theory propounded may be briefly stated thus: The expansion of the American economy came to an end in 1929. Before that it had grown for several well-known reasons. (1) There was a rapid increase in population due to free immigration. (2) The frontier was open to entry and exploitation. (3) Technological expansion went forward upon an amazing scale. But all this came an end. Population is no longer increasing save at a small rate. The frontier is gone, having been exploited and settled. Technological advance at the old rate is no longer possible—the great era of revolutionary inventions is over. A basic change had come over the structure of the American economy.

The theory continued: Government spending on the First New Deal had been proved to be a powerful. Too many people made the mistake of supposing that this was a temporary expedient to bring back a self-sustaining economic recovery. Government spending must be not be used as merely a pump primer, but as a permanent additional or auxiliary pump. The old pump—private industry and business—could no longer produce the national income required for a full life. The government had to set up built in stabilizers to maintain prosperity. "The government must assume full responsibility for maintaining national income at a sufficiently high level to assure full utilization of our human and material resource."

The theory continued: Government spending on the First [[New Deal]] had been proved to be a powerful. Too many people made the mistake of supposing that this was a temporary expedient to bring back a self-sustaining economic recovery. Government spending must be not be used as merely a pump primer, but as a permanent additional or auxiliary pump. The old pump—private industry and business—could no longer produce the national income required for a full life. The government had to set up built in stabilizers to maintain prosperity. "The government must assume full responsibility for maintaining national income at a sufficiently high level to assure full utilization of our human and material resource."

This must be done, they insisted, by government spending. "The notion that public spending can he safely resorted to as a temporary emergency device must he abandoned."

This must be done, they insisted, by government spending. "The notion that public spending can he safely resorted to as a temporary emergency device must he abandoned."