Bailout Harks Back to FDR, With More Risk

'Unimaginable' spending will mean WWII-sized deficit
By Matt Cantor,  Newser Staff
Posted Nov 30, 2008 2:37 PM CST
Bailout Harks Back to FDR, With More Risk
Obama's administration will take a 'win-at-any cost approach,' Puzzanghera writes.   (AP Photo/Charles Dharapak)

Washington's latest $1 trillion injection into the economy echoes Depression-era and WWII revival plans, but with a dangerous twist, writes Jim Puzzanghera in the Los Angeles Times. Even if the bailouts succeed, the government's mountain of debt will likely bury the next generation in high interest rates and inflation. And unlike Depression-WWII spending, today's rescue plans are not building new factories or creating new technologies.

FDR-era spending sparked an economic revival in the late 1940s, but analysts warn that today's bailouts aim only to keep financial institutions afloat and won't rekindle the economy. Still, Barack Obama has said that his first goal is to keep the economy afloat and create jobs. "As soon as the recovery is well under way, then we've got to set up a long-term plan to reduce the structural deficit," he said.
(Read more financial crisis stories.)

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