Johnson vows to spend Britain back to health
Does the West need a new Roosevelt? As the world comes out of lockdown but heads into economic catastrophe, some say leaders should look to the past to find a solution to the crisis.
Boris Johnson is to launch a spending spree tomorrow – one of the biggest in Britain’s history. New roads, homes, and schools are all part of his new plan to save capitalism after the coronavirus.
Many commentators are already shocked. Conservative governments are normally known for balancing the books. Yet here is a Tory prime minister planning to spend as if there were no tomorrow.
What on Earth can be going on?
The answer may be found in a remarkable speech made this weekend by the government’s leading thinker, Michael Gove, a member of “the quad”, a powerful group of four ministers which runs the country alongside the PM.
Gove is calling for a revival of capitalism based on one of America’s most famous presidents, Franklin D Roosevelt (FDR), best known for rescuing the US from the Great Depression of the 1930s.
FDR identified three critical needs. Firstly, to make the “forgotten” people the first concern of policy.
Secondly, to reform government to make it an efficient force for good. In the UK today, Gove is calling for politicians to leave London and move closer to “the people”.
Finally, FDR believed that, to solve a crisis, leaders must take risks. The New Deal was a radical experiment and many of its programmes failed – but it allowed progress and restored the economy.
So, does the West need a new Roosevelt?
New New Deal?
Yes, say some. FDR’s New Deal is credited with saving the American economy in a time of crisis. After months of shutdown, spending sprees like Boris Johnson’s could be what the world’s economy needs to promote growth and thrive again.
No, say others. The government has already spent an unprecedented amount during the coronavirus crisis, and Britain simply cannot afford to build up more debt.
- Is it ever okay to spend money you do not have?
- When was the last time you took a big risk? Write half a side explaining what the risk was and whether it paid off.
Some People Say...
“Take a method and try it. If it fails, admit it frankly, and try another. But by all means, try something.”Franklin D Roosevelt (1882-1945), 32nd president of the USA
What do you think?
Q & A
- What do we know?
- It is generally agreed by historians that Roosevelt’s New Deal was the driving force that saved the American economy following the Great Depression. When Roosevelt, a Democrat, was elected in 1932, unemployment stood at an astonishing 15 million people (over 20% of the population). By 1937, the unemployment rate had fallen from a peak of 24.9% in 1933 to 14.3%. In comparison, in April 2020, the US unemployment rate rose from 4.4% to 14.7%, with similarly bleak figures all around the world.
- What do we not know?
- One main area of debate surrounds whether a New Deal-style plan would work today as it did in the 1930s. This economic crisis is very different to previous recessions. Whereas the Great Depression started with the stock market crash in 1929, this economic slump has been caused by an entirely different event – the coronavirus pandemic. With the virus not yet eradicated and fears of a second wave, will more spending will be enough to restart the economy?
- Spending spree
- Spending a lot of money in a short time.
- Balancing the books
- When the Conservatives came to power in the UK in 2010, they pursued a policy of austerity – cutting spending to reduce the national debt.
- A member of the UK Conservative party.
- A group of four senior ministers who meet daily to plan the path out of lockdown. Alongside Gove, the Quad includes Health Secretary Matt Hancock, Chancellor of the Exchequer Rishi Sunak and Foreign Secretary Dominic Raab.
- Franklin D Roosevelt
- The 32nd US President, and the only president to be elected to the office four times. Widely known as FDR.
- Great Depression
- A severe worldwide economic depression that started in the US in 1929. People left homeless created shanty towns called Hoovervilles after then President Herbert Hoover.
- Extremely important.
- To make changes to improve things.
- New Deal
- A series of programmes and projects started by FDR to stabilise the economy, which significantly expanded the scope of government.
- Never done or seen before.