Daily Archives: January 12, 2012

A Federally-Funded Jobs Program? Lessons from the WPA

By John Henry

In the current debates surrounding various jobguarantee programs (in association with the Chartalistor Modern Money perspectives), it might prove helpful to review some aspects ofthe Works Progress Administration (renamed in 1939 as Work ProjectsAdministration).  While the WPA was not a“job guarantee” program, it nevertheless points to a number of issues that areunder current discussion, including those of the nature of the projectsundertaken, impact on the larger economy, concerns surrounding bureaucraticimpediments, etc.  Let’s begin with an introductory statement pertainingto the political and economic orientation of Franklin Delano Roosevelt (and hisAdministration).
Roosevelt was nota progressive. He ran on a balanced budget platform, and initially attempted tofulfill his campaign promise of reducing the federal budget by slashingmilitary spending from $752 million in 1932 to $531 million in 1934, includinga 40% reduction in spending for veteran’s benefits which eliminated thepensions of half-a-million veterans and widows and reduced the benefits forthose remaining on the rolls. As well, federal spending on research andeducation was slashed and salaries of federal employees were reduced. Suchprograms were reversed after 1935. And one might recall that Rooseveltattempted to return to a balanced budget program in 1937, just as the economyappeared to be slowly recovering. The result was a renewed depression thatbegan in the fall of that year and ran through 1938.