Roosevelt was elected President of the United States in 1933. He made clear that he intended to stabilize the economy and create jobs to the millions of unemployed population. The New Deal refers to a chain of programs and projects instituted by President Roosevelt. FDR once said that “necessitous people are not free” through which he meant that people who were hungry and lacked basic needs were more likely to be used by bad leaders since they are willing to give up their freedom. FDR believed that raising taxes was a way of giving people more of this freedom. For instance, raising taxes would enable the government to cater to public services and welfare spending, making it possible for social services to reach all people, whether poor or rich. He believed that by raising taxes, the government would be better funded to offer better services such as higher education, better medical care, and affordable housing. He believed that it was the rights for everyone to have decent jobs that enable them to cater for their families. He also insisted on the right to protection from economic uncertainties of sickness, unemployment, accident, and old age. This, he believed was the best way to give the citizens more freedom in the long run, and that the most effective way of doing this was by increasing welfare spending since, after all, it rewarded the people for their hard work.
FDR used these policies to come up with the Social Security Act of 1935. The main objective of this act was to insure people against risks such as disability, death or unemployment, to reduce risk related to loss of income. The question of whether raising taxes is a way of increasing or reducing freedom remains open for discussion. However, taking the Nordic countries as an example, there is proof that raising taxes can increase the freedom of people. These countries have a higher tax rate compared to Anglophone ones, but due to their spending on social projects, their economy outperforms that of the Anglophone ones.
Herbert Hoover will be remembered for witnessing the start of the greatest economic crisis ever to hit the United States of America during his term as president. Triggered by the stock market crash of September 4th, 1929, the Great Depression saw a severe fall in the global gross domestic product (GDP) by 15%. Many countries were profoundly affected by losses in almost every sector, from construction to farming. The Great Depression is described as the most severe economic downturn in the history of the industrialized world. A drop in investment and consumer spending caused declines in industrial production and employment, most companies laying off workers. This is most likely what forced Hoover, a man who saw the raising of taxes as a way of limiting people’s freedom. Instead, he set up policies that he believed would help in stabilizing the economy without having to increase welfare spending.
There is undeniable truth in the argument behind Hoover’s believe that raising taxes and increasing welfare spending was an act of restricting freedom. For instance, raising taxes to equalize the social services offered to both the rich and poor undermines the work ethic of both, making the rich feel demotivated to work harder since the shove into their income gets deeper. Instead of increasing welfare spending, Hoover encouraged private organizations and local governments to offer direct relief arguing that public works would be too expensive for the federal government. According to Hoover, raising taxes to increase welfare spending would make Americans substitute work for leisure, choosing to depend on relief. Hoover, therefore, came up with reforms that he hoped would substitute the option of increasing welfare spending to avoid eroding the working culture of Americans; afraid that it would only lead to low self-esteem since people would not have the incentive to work or accept fulfilling jobs; a culture Hoover believed diminished the freedom of the people.
Roosevelt, F. D. Fireside Chat, September 30, 1934. Online by Gerhard Peters and John T. Woolley, The American Presidency Project. https://www.presidency.ucsb.edu/node/208160
Short, B. (1991). The Rhetoric of the Post-Presidency: Herbert Hoover’s Campaign against the New Deal, 1934-1936. Presidential Studies Quarterly, 21(2), 333-350.