Hoover turned to austerity after his public-works response proved fiscally trivial

Evidence

Even though the state had limited its ambitions to balancing the budget and ensuring convertibility, because of the unexpected bursting of the stock market bubble, Hoover spent $1.5 billion on public works when he became president in 1929. By 1931, overall federal spending was up by a third from its 1929 level. Given how small state expenditures remained relative to GDP, however, the now-accelerating decline in private spending meant that tax “receipts dwindled by 50 percent and expenditure rose by almost 60 percent.” At this juncture Hoover saw austerity as the only way, and the right way, to restore “business confidence” and balance the budget. — Mark Blyth, Austerity, 507

Categorization

• XREF: The ‘restore business confidence’ rationale is the exact rhetoric Bessner and Matthijs identify in contemporary austerity discourse, and directly feeds Mattei’s project. — connects to: Hoover’s policies only smoothed adjustment rather than compensating countercyclically. — Mark Blyth, Austerity: The History of a Dangerous…, 325; Hoover raised taxes in the 1931 recession to signal fiscal resolve, deepening the depression — Mark Blyth, Austerity: The History of a Dangerous…, 326; Hoover’s 1931 tax hike to balance the budget drove US unemployment to 23 percent — Mark Blyth, Austerity: The History of a Dangerous…, 508 (+1 more)
• SHARE: The trivial scale of Hoover’s public works relative to collapsing private spending is a great corrective for anyone who still buys the ‘Hoover was a big spender’ myth.

Broader Connections

• Hoover raised taxes in the 1931 recession to signal fiscal resolve, deepening the depression #corroborates (0.95) — Mark Blyth, Austerity, 326
• Hoover’s 1931 tax hike to balance the budget drove US unemployment to 23 percent #corroborates (0.80) — Mark Blyth, Austerity, 508
• Hoover’s policies only smoothed adjustment rather than compensating countercyclically. #qualifies (0.75) — Mark Blyth, Austerity, 325