So he's concerned about the deficit but not how much comes from the economy naturally? Who hired this buffoon?
In the final moments of this clip, Steve mentions 1937. That's not the first time I've heard that mentioned and it will likely not be the last. So what happened then?
By the spring of 1937, production, profits, and wages had regained their 1929 levels. Unemployment remained high, but it was considerably lower than the 25% rate seen in 1933. In June 1937, some of Roosevelt's advisors urged spending cuts to balance the budget. WPA rolls were drastically cut and PWA projects were slowed to a standstill. The American economy took a sharp downturn in mid-1937, lasting for 13 months through most of 1938. Industrial production declined almost 30 per cent and production of durable goods fell even faster.
Unemployment jumped from 14.3% in 1937 to 19.0% in 1938, rising from 5 million to more than 12 million in early 1938. Manufacturing output fell by 37% from the 1937 peak and was back to 1934 levels. Producers reduced their expenditures on durable goods, and inventories declined, but personal income was only 15% lower than it had been at the peak in 1937. In most sectors, hourly earnings continued to rise throughout the recession, which partly compensated for the reduction in the number of hours worked. As unemployment rose, consumers' expenditures declined, leading to further cutbacks in production.
I've often said that the economy of today is nothing like it was during Roosevelt's tenure as President. However, the very idea of stopping all spending at once in order to balance the budget is a very risky endeavour that I'm sure Santelli knows will likely backfire, he's just too caught up in his faux populist fervor to admit it right now.