The Great Depression was caused by government intervention and the financial system controlled by America’s central bank. It was worsened by the interventionists’ policies of Hoover and Franklin D. Roosevelt (FDR). There has been a focus on why FDR believed that freedom would be increased by increasing welfare spending and imposing higher taxes on products, and why Hoover believed that increasing welfare spending and imposing high taxes would limit freedom.
In his 1941 State of the Union Address, FDR enumerated what he called the four essentials of human freedoms, including freedom of what you want, freedom from fear, among others. During the Great Depression era, the United States had been hit with financial challenges. Thus, FDR suggested that raising taxes and increasing welfare would increase the freedom of people to get what they want. He believed that raising taxes would enable the government to generate more revenue, and ensure that it balances the supply and demand for money across the country (Mitchell 1935). FDR believed that this approach would end the crisis that had been caused by financial problems, and that Americans would get whatever they want, such as venturing into businesses because the money would be sufficient.
Hoover saw FDR’s approach to be restricting freedom because of various reasons. Hoover argued that raising taxes and increasing welfare spending would rob Americans of the little cash they had hard-earned. He also argued that raising taxes would damage economic growth and job creation opportunities (“Greater Security for the Average Man” 207). He suggested that lowering taxes would ensure that more job opportunities are created, resulting in the growth of the U.S. economy, which would lead to the end of the crises.
“Greater Security for the Average Man.” U.S. History II (American Yawp), Lumen Learning, pp. 207–208.
Mitchell, Broadus. The Depression Decade: From New Era through New Deal, 1929-41. Routledge, 2017.