On the surface the idea behind the RFC sounds good. By 1932 the Great Depression had already been devastating. Banks were failing, railroads were going broke, workers had been laid off by the millions. Why not pump cash into some large struggling companies and keep them serving customers and hiring workers? Jobs would be saved, dollars would flow through the economy, and the Great Depression might be halted.

But there were two big problems. First, the $2 billion the RFC would dole out had to come from taxpayers. And they could have used that money instead to buy radios, shirts, gas, or a host of other products that would have put people to work making and selling these items. In other words, shifting capital from workers who earn it to central planners who spend it may not create or even save jobs.

Second, Hoover’s whole idea of an RFC assumed that a group of wise men could discern the U.S. economy clearly enough to pick the right banks, railroads, and corporations to resuscitate with the right amount of cash. What we find instead is that when an appointed committee like the RFC is matched with large amounts of money, the results quickly become politicized.

Thousands of large U.S. companies wanted capital, but only a fraction of them could get it. Rep. Louis McFadden (R, Pa.), himself a bank president, called the RFC “a scheme for taking $500,000,000 of the people’s money produced by labor at a cost of toil and suffering and giving it to a supercorporation for the sinister purpose of helping a gang of financial looters to cover up their tracks.”

Immediate Politicization

Hoover, a Republican, appointed former Republican Vice President Charles Dawes to head the new RFC. Dawes, however, resigned in June 1932 to care for his bank in Chicago, the Central Republic Bank and Trust Company. Three weeks after his resignation, Dawes won a $90 million loan for his failing bank (it went broke anyway). After that, Atlee Pomerene, the new RFC president, accepted a $12.3 million loan for his Cleveland bank. Joseph Nutt, treasurer of the Republican National Committee, won a $14 million loan for his bank in Cleveland. Republican Senator Phillips Goldsborough of Maryland received a $7.4 million loan for his Baltimore bank. Roy Chapin, Hoover’s secretary of commerce, won $13 million for his Detroit bank.

Some Democrats (Pomerene was a former Democratic senator) also finagled loans from the RFC, but the larger point is that choosing who got loans and who didn’t was a political process that gave capital to the winners and took more in taxes from everyone else. Funding federal programs was expensive. During 1932, for example, the top income earners saw their top tax rate hiked from 25 to 63 percent. Plus Congress that year passed a host of new excise taxes on gas, tires, telephone calls, and movie tickets.

The Other Side’s Turn

When Franklin Roosevelt was elected president, he installed a loyal Democrat, Texas banker Jesse Jones, as the new president of the RFC. Jones helped those Roosevelt sent his way—either through RFC loans or by using his influence with others. J. David Stern, for example, edited the Philadelphia Record, which backed Roosevelt and other Democrats enthusiastically in the election. Stern, however, almost went bankrupt in the 1930s, so Roosevelt asked Jones to help. Jones used his influence in the banking community to secure $1 million in loans to keep Stern publishing.

Some reporters were sensitive to the RFC money and influence offered by Jones. Walter Trohan, the Washington bureau chief for the Chicago Tribune, often interviewed Jones, who according to Trohan would often offer RFC loans and agency-controlled firms to him. “I turned these offers down, because I didn’t know anything about such businesses and because I didn’t think I would be honest in accepting,” Trohan revealed in his book Political Animals.

Others did not have Trohan’s scruples. Hall Roosevelt, the President’s brother-in-law, used White House telephones to request loans from the RFC. According to Jones, “Two or three loans were made in which it appeared Hall Roosevelt had some kind of interest.” At one point the President urged Jones to give Hall the loan he requested because, as Jones wrote in his book, Fifty Billion Dollars, “The president wanted to get Hall as far from the White House as possible.” Jones also helped FDR’s son Elliott escape a $200,000 debt from a failed radio business in Texas.

Defenders of the RFC are quick to cite its many loans and gifts during World War II to big corporations to make weapons and supplies that helped the U.S. government win the war. But even if we assume the right corporations got the right loans and gifts, that still leaves the RFC with no reason to exist after the war. The Great Depression had ended and unemployment had stabilized at under 4 percent in 1946 and 1947, yet the RFC was still aiding corporations.

The Closest Thing to Immortality

True, the RFC had lost its economic purpose, but with all those tax dollars on hand it never lost a political purpose. To repeat what FDR once said about Social Security, the RFC loans “were never a problem of economics. They are politics all the way through.” In other words, congressmen eagerly sought RFC money to bring back to corporations in their districts. President Truman noted that “a great many members of Congress had accepted fees for their influence in getting RFC loans for constituents.”

Not only were congressmen profiting, but RFC staffers were using these loans to get jobs with the lucky companies. John J. Hagerty, for example, head of the RFC in Boston, endorsed a loan to the Waltham Watch Company. Hagerty soon accepted a job with the company for three times his RFC salary.

In 1953 President Eisenhower ended the reign of the RFC, but not completely. Parts of it reemerged as the Small Business Administration—which began making loans to favored small businesses.

What do we learn from the RFC? First, that government programs are easier to start than stop; second, that those programs will cost more than the originators intended; and third, that federal money becomes politicized very quickly, helping politicians to win votes.

Franklin Roosevelt recognized that the war only provided a short-term fix for the economy—and a very costly one at that. What would happen after the war—when 12 million troops came home and the strong demand for guns, bullets, tanks, and ships ceased?

Roosevelt envisioned a New Deal revival. He had created the National Resources Planning Board (NRPB) in 1939 and urged it during the war to plan for peacetime. The NRPB leaders believed that government planning was necessary to promote economic development. They consciously (and sometimes unconsciously) followed ideas popularized in 1936 by John Maynard Keynes in his bestselling book, The General Theory of Employment, Interest and Money.

Capitalism was inherently unstable, Keynes argued, and would rarely provide full employment. Therefore government intervention was needed, especially in recessions, to spend massive amounts of money on public works, which would create new jobs, expand demand, and rebuild consumer confidence. Yes, government would need to run large deficits, but economic stability was society’s reward. If government planners could manage aggregate demand through public works, the boom-bust business cycle could be flattened and economic development could be managed in the national interest. No more Great Depressions. Man could indeed be master of his economic future.

Before and during the war Keynes’s ideas swept through the United States and first transformed the universities, then the political culture of the day. With statistics in hand and a near reverence for government, the Keynesians were the new generation of planners. They wanted to remake society. Not entrepreneurs, but economists were needed to gather data, plan government programs, and regulate economic development. Paul Samuelson, for example, a 21-year-old economics student, was cautious at first, but then euphoric after Keynes’s book was published. “Bliss was it in that dawn to be alive, but to be young was very heaven,” Samuelson wrote. Other economists soon accepted Keynes, and by the 1940s his ideas dominated the economics profession. In 1948, Samuelson would defend Keynes by writing the best-selling economics textbook of all time.

Planning for Peace

Those on the NRPB were among the excited disciples of Keynes and economic planning. The war itself seemed to be evidence that government jobs had pulled the U.S. economy out of the Depression. Now the economists and planners needed to take the nation’s helm to plan for peace.

According to Charles Merriam, vice president of the NRPB, “[I]t should be the declared policy of the United States government, supplementing the work of private agencies as a final guarantor if all else failed, to underwrite full employment for employables. . . .” That idea launched what Merriam and the NRPB dubbed “A New Bill of Rights.” FDR would call it his Economic Bill of Rights. Included was a right to a job “with fair pay and working conditions,” “equal access to education for all, equal access to health and nutrition for all, and wholesome housing conditions for all.”

New Bill of Rights

FDR viewed this Economic Bill of Rights as his tool for guaranteeing employment for veterans (and others) after World War II. But it was more than a mere jobs ploy; it had the potential to transform American society. The first Bill of Rights, which became part of the Constitution, emphasized free speech, freedom of the press, and freedom of religion and assembly. They were freedoms from government interference. The right to speak freely imposes no obligation on anyone else to provide the means of communication. Moreover, others can listen or leave as they see fit.

But a right to a job, a house, or medical care imposes an obligation on others to pay for those things. The NRPB implied that the taxpayers as a group had a duty to provide the revenue to pay for the medical care, the houses, the education, and the jobs that millions of Americans would be demanding if the new bill of rights became law. In practical terms this meant that, say, a polio victim’s right to a wheelchair properly diminished all taxpayers’ rights to keep the income they had earned. In other words, the rights announced in the Economic Bill of Rights contradicted the property rights promised to Americans in their Declaration of Independence and in the Constitution.

FDR promoted his Economic Bill of Rights in his State of the Union message in 1944, but he died before the war ended. Shortly before his death, Senator James Murray (D-Mont.) introduced a full-employment bill into the Senate for discussion. The bill committed the government in a general way to provide jobs if unemployment became too high. Many leading Democrats and economists supported Murray’s bill. “In this session of Congress,” The New Republic reported, “one of the first bills to be introduced will no doubt be the full employment bill of 1945, designed to carry out item number one in the Economic Bill of Rights.” The Nation joined The New Republic in endorsing the full-employment bill. “Mr. Roosevelt’s program,” it concluded, “is squarely based on the best economic authority available. It is entirely consistent with the economic doctrines of the distinguished British economist Lord Keynes.”

On September 6, 1945, President Harry Truman gave a major speech in which he supported the Economic Bill of Rights, especially a full-employment bill. Most congressmen, however, rejected both. Rep. Harold Knutson (R-Minn.) said, “Nobody knows what the President’s full employment bill will cost American taxpayers, but the aggregate will be enormous.”

Instead, Knutson and many other congressmen favored cutting tax rates and slashing the size of government as the best measure to restore economic growth. Senator Albert Hawkes (R-N.J.) even argued that “the repeal of the excess-profits tax, in my opinion, may raise more revenue for the United States than would be raised if it were retained.” Hawkes proved to be prophetic. After vigorous debate Congress scrapped the Economic Bill of Rights and cut tax rates instead. American business then expanded, revenues to the Treasury increased to balance the federal budget, and unemployment was only 3.9 percent in 1946 and 1947. The Great Depression was over.

Those two sentences helped focus the Progressive worldview. First, the United States needed an income tax to capture large chunks of revenue. Second, someone who had a large fortune, “by the mere fact of its size,” had to be treated differently from other wealth holders. Property rights became variable. One group would be treated one way, other groups would be treated another way. Third, the nation needed a “graduated income tax” to redistribute wealth from the haves to the have-nots. The new tax slogan would be “ability to pay.”

Author Delos Kinsman, writing while Roosevelt was president, said, “Individuals should contribute to the support of the government according to ability.” And “income is the most just measure of that ability.” Enlightened leaders like Teddy Roosevelt would redistribute wealth in the national interest.

Roosevelt’s thinking was a profound change from the views of the Founders. To them, government existed to protect property, not redistribute it. Americans had a right to pursue life, liberty, and property, not an entitlement to it. Thus the Founders never considered raising revenue through an income tax, least of all a graduated one. They wanted consumption taxes—levies on imports or on luxury goods. Why? Because, as Alexander Hamilton said in Federalist 21, “The amount to be contributed by each citizen will in a degree be at his own option, and can be regulated by an attention to his resources.”

Hamilton added, “If duties are too high, they lessen the consumption; the collection is eluded; and the product in the treasury is not so great. . . . This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.”

American law also reinforced the use of consumption taxes. “All duties, imposts and excises shall be uniform throughout the United States,” the Constitution reads. What could be more uniform than Congress’s first excise tax of seven cents a gallon on all whiskey produced in the United States?

Not Good Enough

Progressives, however, disliked consumption taxes as the major source for revenue. They were too small, too cumbersome to collect, and sometimes too regressive—wealth never properly redistributed itself through consumption taxes. Taxes on whiskey, tobacco, and imported olives from Spain shifted very little, if any, wealth from rich to poor. In 1913 the House Ways and Means Committee observed that federal revenue rested “solely on consumption. The amount each citizen contributes is governed, not by his ability to pay taxes, but by his consumption of the articles needed.” Swollen fortunes, as Roosevelt might say, went untaxed and became more swollen while some immigrants lived in poverty.

The Sixteenth Amendment was ratified in 1913, giving Congress the “power to lay and collect taxes on incomes from whatever source derived.” It did not rule out “ability to pay” as the basis for the levy. The amendment became law just as Woodrow Wilson was coming into the presidency. As a Progressive, Wilson wanted to start small, establish a precedent, and then increase rates over time. Under the new tax law, exemptions were so high that few Americans earned enough to pay any tax. Rates started at 1 percent and rose slowly to a high of 7 percent on all income over $500,000.

Progressives easily sold this tax plan to the voters. Fewer than one American family in 100 paid anything, but politicians could promise audiences that they might receive benefits from the revenue. And who would dare to suggest that billionaire John D. Rockefeller did not have the ability to pay 7 percent of his huge income to the government?

Ability to Pay

Yet that raises an interesting question. At what tax rate did Rockefeller, or other wealthy men, cease to have the ability to pay? If they could pay 7 percent, could they pay 15? Apparently so, because in 1916 Wilson and Congress raised the top rate to 15 percent. Unlike with a consumption tax, under the income tax politicians judge ability to pay and they choose the rates they think rich people can afford. If politicians choose rates too high they may lose the support of the rich, but they may gain support of those larger groups receiving subsidies from the tax revenue. If wealth really needs to be redistributed, should we trust people to do it with their own money or politicians with other people’s money?

Rockefeller, for example, was the best and cheapest oil refiner in the world. His charitable giving included the Erie Street Baptist Church, a cure for meningitis, and funding for Tuskegee Institute. That was how he redistributed his own wealth. Andrew Carnegie, the steel baron, built libraries, and banker Andrew Mellon built the National Gallery of Art in Washington, D.C. In the political realm, President Franklin Roosevelt supported high taxes and gave subsidies to silver miners, farmers, and the Tennessee Valley Authority to make cheap electric power.

Charitable givers and politicians both pursue their self-interest, but the politician’s self-interest includes winning votes. That means, if possible, channeling subsidies to voting groups to win reelection at the expense of taxpayers in general. Rockefeller’s gifts to Tuskegee did not cost anyone but him any money. FDR’s subsidy to silver miners, by contrast, cost millions of taxpayers small amounts of tax revenue. It helped FDR carry several western states each time he ran for president. His redistribution efforts were essential to his being reelected.

Thus U.S. politicians had incentives to steadily increase the income tax in the 1900s. The top rate went from 7 to 15 percent in Wilson’s first term. World War I took it over 60, then over 70 percent. It didn’t drop below 50 percent until 1924, and was about 25 percent the rest of the decade. The rate rose to 63 percent in 1932 under Herbert Hoover and then 79 percent in 1935. The World War II years pushed it over 80 percent, and in 1945, FDR’s last year in office, the top was 94 percent on all income over $200,000. Wealthy people apparently had a very high ability to pay, and politicians had a very high desire to fight wars and win elections.

Few historians, however, describe the costs of the war. Not just the 620,000 individuals who died, or the devastation to southern states, but the economic costs of waging total war. What was the economic impact of the Civil War on American life?

The first and most important point is that the Civil War was expensive. In 1860 the U.S. national debt was $65 million. To put that in perspective, the national debt in 1789, the year George Washington took office, was $77 million. In other words, from 1789 to 1860, the United States spanned the continent, fought two major wars, and began its industrial growth—all the while reducing its national debt.

We had limited government, few federal expenses, and low taxes. In 1860, on the eve of war, almost all federal revenue derived from the tariff. We had no income tax, no estate tax, and no excise taxes. Even the hated whiskey tax was gone. We had seemingly fulfilled Thomas Jefferson’s vision: “What farmer, what mechanic, what laborer ever sees a tax-gatherer of the United States?”

Four years of civil war changed all that forever. In 1865 the national debt stood at $2.7 billion. Just the annual interest on that debt was more than twice our entire national budget in 1860. In fact, that Civil War debt is almost twice what the federal government spent before 1860.

What’s worse, Jefferson’s vision had become a nightmare. The United States had a progressive income tax, an estate tax, and excise taxes as well. The revenue department had greatly expanded, and tax-gatherers were a big part of the federal bureaucracy.

Furthermore, our currency was tainted. The Union government had issued more than $430 million in paper money (greenbacks) and demanded it be legal tender for all debts. No gold backed the notes.

The military side of the Civil War ended when Generals Ulysses S. Grant and Robert E. Lee shook hands at Appomattox Court House. But the economic side of the war endured for generations. The change is seen in the annual budgets before and after the war. The 1860 federal budget was $63 million, but after the war, annual budgets regularly exceeded $300 million. Why the sharp increase?

First, the aftermath of war was expensive. Reconstruction governments brought bureaucrats to the South to spend money on reunion. More than that, federal pensions to Union veterans became by far the largest item in the federal budget (except for the interest payment on the Civil War debt itself). Pensions are part of the costs of war, but the payments are imposed on future generations. In the case of the Civil War, veterans received pensions only if they sustained injuries severe enough to keep them from holding a job. Also, widows received pensions if they remained unmarried, as did their children until they became adults. Confederates, of course, received no federal pensions.

Pensions and Tensions

The Civil War pensions shaped political life in America for the rest of the century. First, northern states benefited from pension dollars at the expense of southern states. That kept sectional tensions high. Second, Republicans “waved the bloody shirt” and blamed Democrats for the war. Republican presidents had incentives to keep the pension system strong, and the Grand Army of the Republic (GAR) lobbied to get as much money for veterans as possible.

The federal government established pension boards to determine whether injuries to veterans warranted a pension. But the issue was complex. Sometimes, veterans created or faked injuries; others argued that injuries received after the war—for example, falling off of a ladder while fixing a roof—were really war injuries. If the pension board turned down an application, the veteran sometimes pleaded to his congressman—who was often able to get a special pension for his constituent through Congress. The corrupt pension system corroded politics for the whole 1865-1900 period.

President Grover Cleveland tried to stop congressmen from voting pensions to constituents with bogus injuries by vetoing bill after bill. His successor, Benjamin Harrison, “solved” the problem by signing the Blair bill, which liberalized pensions to the point that even old age made a veteran eligible for a pension. During the 1890s, after most veterans had died, pension payments remained a huge and corrupting item in the federal budget.

The economic impact of the Civil War extended beyond pensions. One argument made during the war was that transportation needed to be improved to connect California with the other Union states. President Lincoln signed a bill establishing federal subsidies for building two transcontinental railroads.

Lincoln was a gifted writer and an able defender of natural rights, but on railroad subsidies he had a reverse Midas touch. During the 1830s, for example, when Lincoln was in the Illinois legislature, he helped lead the charge for a $12 million subsidy to bring railroads to the major cities of Illinois. Unfortunately for Lincoln, the money was wasted and the railroads largely went unbuilt. According to William Herndon, Lincoln’s law partner, “[T]he internal improvement system, the adoption of which Lincoln had played such a prominent part, had collapsed, with the result that Illinois was left with an enormous debt and an empty treasury.”

Bribes Across America

When Lincoln signed the transcontinental railroad bill in 1862, he was creating an even larger boondoggle. The Union Pacific and Central Pacific Railroads were to be paid by the mile to lay track from Omaha to Sacramento. Thus, the UP and CP had incentives to create mileage, but not quality mileage. Their railroads were sometimes not straight, and other times went over hilly terrain that was impossible for a train to surmount. When finished, parts of what they had built were unusable, but both lines had paid off politicians (with some of their subsidy money) to continue the subsidies and not inquire closely on how they were being spent.

Lincoln is not responsible for the corruption that occurred after he died, but the Republican leaders during the war committed themselves to many federal interventions other than the constructive one of ending slavery. The National Banking Act of 1863, and amendments to it, brought greater federal control to banking and imposed a 10 percent tax on state bank notes.

The Morrill Act of 1862 gave 17.4 million acres of federal land to states to build land-grant colleges to teach citizens agriculture and science. Gifts of land and statements of educational focus seem like minor interventions, but the Constitution gave no role to the federal government in subsidizing education or creating universities. The Morrill Act became an entering wedge for later interventions (the Hatch Act of 1887 and the Smith Lever Act of 1914) that established direct federal subsidies to those same land-grant colleges.

Once the federal government intervenes in an area, it’s hard to remove the controls and easy to expand them. The Gilded Age generation did, however, halt some of those Civil War interventions. Those moves back to freer markets in the late 1800s help account for the tremendous economic growth during that time.

Some Rollbacks

The starting point here is the decision after the Civil War to reduce the $2.7 billion national debt. From 1866 to 1893, the U.S. government had budget surpluses each year and slashed the national debt to $961 million. Annual revenue during these years was about $350 million and expenses were about $270 million—most of which consisted of Civil War pensions and interest on the national debt.

One reason the federal budgets tended to be lower in the 1880s than in the 1860s and 1870s was that interest payments on the debt declined sharply as the debt disappeared. For example, the annual interest on the national debt dropped from $146 million in 1866 to only $23 million in 1893. The generation that fought the Civil War became the politicians of the Gilded Age, and they had the fortitude to wipe out almost two-thirds of the Civil War debt.

Speaking of Civil War politicians, those in the Grant administration—long maligned by historians—established many of the conditions for the freedom and prosperity of the Gilded Age. For example, Grant helped make sure the U.S. government had budget surpluses by winning $15.5 million from Britain for damages done to Union ships by the Alabama and other ships the British built for the Confederates. In 1875 Grant also signed the Specie Resumption Act, which promised to redeem the Civil War greenbacks for gold. Grant committed the United States to a sound currency and fiscal restraint.

Also under Grant, the income and estate taxes were abolished in 1872. He committed the U.S. government to budget surpluses with revenue almost exclusively drawn from tariff duties and excise taxes on alcohol and tobacco. Even before Grant was able to abolish the income tax, he had it changed from a progressive to a flat tax.

The income tax during the Civil War—the first in U.S. history—was not onerous by today’s standards. Early in the Civil War, Congress passed a flat 3 percent tax on all income over $800 (which was much more than most families earned). Then Congress made the tax progressive and raised the top marginal rate to 10 percent.

When Grant had the income tax abolished, he returned the nation to the tax system envisioned by the Founders. In Federalist 21, for example, Alexander Hamilton defended a system of consumption taxes (tariffs and excises) against income taxes—which can be more divisive and more easily manipulated by politicians. Under consumption taxes, Hamilton argued, “The amount to be contributed by each citizen will in a degree be at his own option, and can be regulated by an attention to his resources.”

Hamilton added, “If duties are too high, they lessen the consumption. . . . This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.”

After the Civil War, Americans chose to consume alcohol and tobacco in sufficient quantities to help pay down the debt each year for most of the rest of the century. American industry recovered under such limited government, and the Civil War generation paved the way for economic greatness. They overcame much of the financial damage from the Civil War.

As General William T. Sherman observed, “War is hell.” That hell includes oppressive taxes, loss of freedom, and crushing debt, as well as deaths in combat. But once in war, as the United States was after Pearl Harbor, losing is an even greater hell. Thus we had a need for war entrepreneurs, and some—like Higgins—were given enough freedom to innovate and help U.S. troops finish the war sooner than expected.

Andrew Higgins became indispensable because he was one of the very few men who could create and manufacture reliable landing craft to transport troops from ship to shore. Using landing craft in warfare was a key World War II innovation. Troop ships would bring thousands of soldiers within a mile or so of the coast. Then the soldiers would climb down the sides of the ships on cargo nets into Higgins boats (as his assortment of landing craft came to be called), each holding 36 men. The landing craft would then bring the soldiers into shore—a ramp would open at the end of the boat, and the men would disembark. Then the boats would return to the troop ship to load more men.

Higgins’s boats were so reliable, so flexible, and so fast that Americans could reach many different parts of a coastline, not just the major ports. Thus the Higgins boats gave Eisenhower many options for landing spots into North Africa, then into Italy, and finally into France. The Germans couldn’t cover the entire European coast, and the Allied forces used thousands of landing craft to hit Normandy beach at D-Day.

What’s especially remarkable about the Higgins story is that he almost didn’t get a chance to show the world what he could do. The biggest obstacle Higgins faced was overcoming the bureaucrats in the U.S. Navy. In particular the Bureau of Ships, which had authority to buy landing craft for the Navy, regularly refused to consider Higgins’s offers to supply various landing craft and PT boats. Why?

First, the Bureau of Ships wanted to use its own internally designed landing craft. What’s more, the naval leaders couldn’t imagine Higgins, a small boat builder from Nebraska, having the answers to the Navy’s needs. Therefore, they usually rejected his offers and nitpicked his designs, then purchased their own inferior vessels.

With the success of the war, and his company, at stake, Higgins fought back. “I don’t wait for opportunity to knock,” he said. “I send out a welcoming committee to drag the old harlot in.” He openly condemned the Bureau of Ships for “prejudice” against his boats. American lives were being lost, he contended, because Higgins boats were on the sidelines. Jerry Strahan describes Higgins’s battle with the Navy bureaucracy in Andrew Jackson Higgins and the Boats that Won World War II.

Higgins called the tank lighter—the mechanized landing craft that carried tanks—built by the Bureau of Ships “godawful.” He added, “I want to say that there are no officers, whether present in this room or otherwise in the Navy who know a goddamn thing about small boat design, construction, or operation—but by God, I do.”

Of the Bureau of Ships, Higgins said, “If the ‘red tape’ and the outmoded and outlandish Civil War methods of doing business were eliminated, the work could be done in the Bureau of Ships very efficiently with about one-sixth the present personnel.” The bureaucrats at the Bureau of Ships loathed Higgins and rejected his superior boats, even when their own vessels malfunctioned and killed American soldiers in transport.

Fortunately for Higgins, the U.S. war effort was just decentralized enough to give him a chance to go outside the naval bureaucracy to prove himself. First, the Marines desperately needed amphibious boats, and after doing tests they discovered that the Navy’s landing craft often didn’t work but Higgins boats did. The Marines bought Higgins boats when possible and helped get a hearing for Higgins in higher tribunals. Second, Congress authorized the Truman Committee to investigate waste and corruption in the war effort. Higgins at last won a hearing from Senator Harry Truman and dramatic results followed: Truman demanded a “head-to-head operational test” of a Higgins boat and a Navy boat.

Head-to-Head

That was all Higgins ever asked for. In the dramatic contest that followed at Norfolk, Virginia, on May 25, 1942, both Higgins and the Navy had to have their landing craft carry a 30-ton tank through choppy waters. During the race, the highly touted boat built by the Bureau of Ships failed—and almost sank—while the Higgins boat dazzled the spectators. With the scrutiny of the Truman Committee, the Bureau of Ships had to convert to Higgins’s design and immediately he began receiving important contracts.

Shocked that the Navy had repeatedly rejected the best boat available, Truman launched a full investigation into naval purchasing and concluded, “[T]he Bureau of Ships has, for reasons known only to itself, stubbornly persisted for over five years in clinging to an unseaworthy tank lighter design of its own. . . . Higgins Industries did actually design and build a superior lighter,” but was ignored because of a “flagrant disregard for the facts, if not the safety and success of American troops.”

With a green light from the Truman Committee and the Bureau of Ships, Higgins expanded his New Orleans plant and frantically churned out landing craft. He attracted good workers from across the country for his assembly lines by paying high wages, offering free medical care, and providing great training and some community services. He hired black and white workers and, although he had to segregate them, he paid them similar wages. Getting good workers and training them was only part of his challenge. He also had to find loopholes in the new federal laws that limited wages and controlled prices and purchases. Higgins often had to buy steel on the black market, and once, when no bronze shafting was available for making tank lighters, he stole the needed material from an oil company in nearby Texas. (He later paid for it.)

During March 1943, as Eisenhower began to prepare to invade Sicily and Italy, he had nightmares of shortages of landing craft. “When I die,” Eisenhower said, my “coffin should be in the shape of a landing craft, as they are practically killing [me] with worry.” The next year, when Ike planned the D-Day invasion, he said, “[L]et us thank God for Higgins Industries, management, and labor which has given us the landing boats with which to conduct our campaign.” A frustrated Adolf Hitler, who could not stop thousands of Higgins boats from landing soldiers at Normandy beach, called Higgins the “new Noah.” The old Noah helped save the animals; the new Noah helped save his country.

Roosevelt’s quest for “a real democracy” and for centralizing power was a clear break with the American founders. James Madison, for example, distrusted both democracy and human nature; he believed that separating power was essential to good government. He urged in Federalist No. 51 that “those who administer each department” of government be given “the necessary constitutional means and personal motives to resist the encroachments of others. . . . Ambition must be made to check ambition.” If power was dispersed, Madison concluded, liberty might prevail and the republic might endure.

Roosevelt argued in this speech that the recent rise of corporations gave businessmen too much economic control. Madison’s constitutional restraints, therefore, allowed too much wealth to be concentrated in too few hands. Redistribution of wealth by government, Roosevelt thought, would achieve “a more substantial equality of opportunity.”

The economic power of railroads triggered Roosevelt’s ire during his presidency. He was frustrated that railroads gave rebates to large customers. In effect, the railroads charged varying rates for carrying the same products the same distance. Roosevelt thought rates should be roughly similar for large shippers and small shippers, especially if the small shippers were far from major cities.

He posed the problem this way: “Combinations in industry are the result of an imperative economic law which cannot be repealed by political legislation. The effort at prohibiting all combination has substantially failed. The way out lies, not in attempting to prevent such combinations, but in completely controlling them in the interest of the public welfare.”

In practical terms, “completely controlling” railroads in the public interest meant that the Interstate Commerce Commission (ICC) would have power to set rates so that larger shippers would not get such big discounts on their high volume of business. James J. Hill, president of the Great Northern Railroad, argued that large shippers received higher rebates because their massive business created “economies of scale” for the railroads—that is, railroads could reduce their costs best when shipping large amounts of goods over the rails. The bigger shippers contributed more to the reduced costs of shipping, so they got larger rebates.

To Roosevelt and to the smaller shippers, rebates for the bigger shippers were “unfair money-getting” and have “tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power.” The founders may have provided a “right to life, liberty, and the pursuit of happiness,” but Roosevelt believed that the pursuit of happiness and private property were not absolute. “We grudge no man a fortune which represents his own power and sagacity,” Roosevelt said—but then added, “when exercised with entire regard to the welfare of his fellows.” If railroads were enriching themselves and larger shippers disproportionately to the smaller shippers, then Roosevelt believed such power to set rates needed to be limited: “The Hepburn Act, and the amendment [Mann-Elkins Act] to the act in the shape in which it finally passed Congress at the last session [1910], represent a long step in advance, and we must go further.”

The Hepburn Act gave the ICC the power to reduce railroad rates and placed the burden on railroads to show their rates were reasonable. One intervention led to another. The railroads now had to prove that the rates they set were fair, so Congress created a Bureau of Valuation, which was empowered with a huge staff to value railroad property. According to historian Ari Hoogenboom, the bureau’s “final report, issued after a twenty-year study costing the public and the railroads hundreds of millions of dollars, disproved assumptions by Progressives that railroads were . . . making fabulous returns on their true investment.”

The lesson that Roosevelt learned from passing the Hepburn Act was that federal power was needed to break up those businesses that engaged in price discrimination. “The citizens of the United States,” Roosevelt said, “must effectively control the mighty commercial forces which they have called into being.”

Once Roosevelt established that the federal government should regulate the prices railroads charged for shipping, the next step was to intervene in other industries as well. “In particular,” Roosevelt argued in his speech, “there are strong reasons why . . . the United States Department of Agriculture and the agricultural colleges and experiment stations should extend their work to cover all phases of farm life. . . .” He added, “The man who wrongly holds that every human right is secondary to his profit must now give way to the advocate of human welfare, who rightly maintains that every man holds his property subject to the general right of the community to regulate its use to whatever degree the public welfare may require it.”

The shift from the individual rights of the founders to the community rights of the Progressives was a watershed transition in American thought in the early 1900s. But Roosevelt needed a federal income tax to help him redistribute wealth in the national interest. The title “New Nationalism” reflected his view that he and other leaders could determine the national interest and redistribute wealth and power accordingly.

Of the income tax Roosevelt said, “The really big fortune, the swollen fortune, by the mere fact of its size, acquires qualities which differentiate it in kind as well as in degree from what is possessed by men of relatively small means, Therefore, I believe in a graduated income tax on big fortunes, and in another tax which is far more easily collected and far more effective—a graduated inheritance tax on big fortunes, properly safeguarded against evasion, and increasing rapidly in amount with the size of the estate.”

Three years after Roosevelt’s speech, the Sixteenth Amendment, authorizing a federal income tax without regard to source, became law. Roosevelt had his wish—the 1913 tax was progressive: Most people paid no income tax, and the top rate was 7 percent. Roosevelt probably envisioned rates not much higher than that, but once Congress established the principle that some people could be taxed more than others, there was no way to calculate or determine what the national interest was.

Within one-third of a century after Roosevelt’s speech, the United States had a top marginal income tax rate of more than 90 percent.

When the individual liberty of the founders was transformed into the national interest of Teddy Roosevelt and the Progressives, we were only one generation away from a major threat to all our personal liberties. That threat still exists today.

Hamby is at his best developing the characters of Churchill, Stanley Baldwin, Hitler—and of course those New Dealers who surrounded President Roosevelt. His brief biographies help make the book readable and interesting.

In interpretation, Hamby’s book is a bit of a puzzle. He does not fully accept the laudable accounts of Roosevelt that have dominated American historiography; but neither does he really reject them. He concedes that the New Deal failed to improve the American economy, but he finds Roosevelt to be a capable president. “Reduced to paper,” Hamby concludes, “the Roosevelt record was hardly impressive. . . . But Roosevelt was impressive. His charisma, rhetorical talents, and dynamism made the New Deal more than the sum of its parts.” Such separating of the President from his record is strange, but it is a step up from exalting both Roosevelt and his record (which is more consistent, but wrong on two counts, instead of just one).

Part of the problem here may be Hamby’s weakness in economic analysis. “Whatever else the [Roosevelt] administration had done,” Hamby observes, “however many benefits it had delivered to Americans, it had not ended the Depression.” When Hamby says this he seems surprised—as though New Deal programs clearly delivered “benefits” but did not inflict costs as it did so.

Henry Hazlitt, a New York Times columnist during the 1930s, repeatedly reminded Americans that whenever a New Deal program conferred cash on a lucky recipient, it had to secure the cash from an unlucky taxpayer. Thus all jobs created by the WPA, CCC, or PWA took capital from consumers that could otherwise have been used to build factories or to buy sweaters or radios or paint for the house.

So when Hamby asks, “Did not governments engage in a social good by giving employment to those who needed it?” the answer is not “yes,” as he implies, but “maybe not,” because cash given to employ, say, street pavers in Ohio lost the chance to employ radio makers in New Jersey or textile workers in South Carolina. In other words, jobs were merely transferred from one group to another.

What this means in terms of analyzing policy is that when Hamby writes in one paragraph that the federal subsidy to veterans in 1935 “pumped about $2 billion into [the] economy,” maybe he should let the reader see in the next paragraph that a tax hike that same year raised the tax rate on top incomes to 79 percent (four years earlier, the top rate had been only 24 percent). The two events need to be discussed together because they function together. Hamby discusses the programs, but rarely bothers with the taxes that transferred the money out of taxpayers’ pockets to pay for them.

The task of those who would defend Roosevelt and the New Deal is to address these transfer payments with all of their ramifications. When Hamby concludes, “The WPA would endure until 1943, doing far more good than harm,” he should explain why Americans were allegedly better off with the WPA and higher income taxes and higher excise taxes on cigarettes, tires, bank checks, movie tickets, and telephone calls than they would have been with no WPA and lower income and excise taxes.

According to the League of Nations World Economic Survey 1938/39, the recovery rates from the Great Depression were much better in France and Britain than in the United States. In 1938 U.S. unemployment, which was barely under 20 percent, was higher than France’s 8 percent and Britain’s 12.6 percent. In that international context, Roosevelt’s New Deal seems to be less, not more, than the some of its parts.

Nonetheless, For the Survival of Democracy is a step forward because Hamby, a mainstream historian, is willing to criticize much of the New Deal and some of Roosevelt’s actions and motives. In his bibliography, he even praises Gary Dean Best, whose book Pride, Prejudice, and Politics is the best modern critique of the New Deal that we have. As we move away from the New Deal era, the quality of history written about it is beginning to improve.

So popular was the idea that in 1806, Congress voted to fund such a road, and Thomas Jefferson signed the bill. Constitutional arguments were important in this debate. Those who favored the road argued that it was a “post road” for mail delivery, and thus was consistent with Article 1, Section 8, of the Constitution.

But would the national road—which would eventually stretch from Cumberland, Maryland, to Vandalia, Illinois—be economically sound? Put another way, even if the road was a good idea, was government funding the best means to achieve it? After more than 700 miles and $7 million in construction costs, we can answer that question. No, the national road was not sound. Nor was it particularly helpful to westward settlement. By 1850 it was little used, and soon after that it was almost abandoned. What went wrong and why?

Three problems inherent in government funding help explain why the national road largely failed.

First, when government money is used to build a road, political decisions, not economic ones, dictate where it is built. In other words, congressmen with political pull will try to draw the road to their districts, whether that route is economically sound or not. As the national road moved north and west from Cumberland to Wheeling, (West) Virginia, it detoured through Union-town and Washington, Pennsylvania. Why? Because Jefferson’s treasury secretary, Albert Gallatin, lived in Uniontown, and he persuaded Jefferson to swing the road there. Gallatin also urged Jefferson to run the road on a northern detour into vote-rich Washington County during an election year. “[T]he county of Washington,” Gallatin wrote Jefferson, “with which I am well acquainted, having represented it for six years in Congress, gives a uniform majority of about 2000 votes in our favor and that if this be thrown, by reason of this road, in a wrong scale, we will infallibly lose the State of Pennsylvania in the next election.” Jefferson responded curtly that “a few towns in that quarter [of Pennsylvania] seem to consider all this expense as undertaken merely for their benefit.” But he still sanctioned Gallatin’s detours.

Second, when the government builds a road, it will cost more than if entrepreneurs build it. The national road was built with stone (crushed and solid), and it became one of the most expensive roads, if not the most expensive, in the United States in the early 1800s. For example, the privately funded Lancaster Turnpike, also built with stone, cost $7,500 per mile—versus $13,000 per mile for the national road. The builders of the Lancaster Turnpike were spending their own money and had to spend it wisely, or the tolls would not cover their expenses. Those in charge of the national road, by contrast, were political appointees, described by one newspaper editor as being “as numerous as the locusts of Egypt.” Funded with taxpayer dollars, the national road never charged tolls, so it never had to turn a profit.

This leads to the final point. Because no one owned the national road, no one had a strong stake in building it well, or preserving it once it was finished. Almost every firsthand account we have suggests that the road was shoddily constructed. Even in its heyday it was never fully paved; it always had gaps and always needed repairing.

For example, Lt. Henry Brewerton of the Corps of Engineers inspected the road in Ohio and found inferior mortar and materials in its construction and tree stumps scattered throughout. Brewerton echoed those who claimed the road fell into disrepair faster than it could be built. Western travelers moaned constantly about the bumpy rides, the steep grades, and the mudslides. David Shriver, the superintendent of the road, complained that travelers stole bridge walls, milestones, and building materials. Lucius Stockton, who traveled the whole of the road and tried to run a passenger service on it, said, “Generally speaking the surface is entirely destroyed, or sunk under the foundation. .. . In one place the foundation itself has been carried away.”

R. J. Meigs, the U.S. Postmaster General in the 1820s, found the road almost impassable and the mail, therefore, almost undeliverable. So slow and erratic was federal mail delivery on it that many merchants along the road used private couriers to ensure speedy and reliable mail service.

Express Mail Started

How ironic! Using the national road as a federal post road was the key to making it constitutional—yet privatized mail service regularly outperformed the U.S. Post Office. In desperation, the Post Office added “express mail” service to try to compete with private couriers on the road, but even that often proved to be slower and more irregular than the private couriers. Angry residents along the road and elsewhere sent express-mail letters postage-due to congressmen complaining about the poor service. Reeling from an avalanche of hostile letters, the Postmaster General instructed all postmasters not to deliver any express mail postage-due to “the President or any head of department.”

By the 1830s, therefore, many congressmen were having second thoughts about using federal funds for the national road. Some of them, like John Campbell of South Carolina, asked, “Who can suppose that the opening of roads by the government is necessary to attract the farmer to the virgin soil of the West?” Other roads, built by the states or by entrepreneurs, also brought immigrants westward. These roads were clearly constitutional, and they needed no federal tax dollars to operate.

he U.S. government, therefore, began in the 1830s to give pieces of the national road to the states in which they were located. Pennsylvania and Maryland, however, refused to accept their pieces even as gifts until they were repaired and made more usable for travel. By 1840, railroads had emerged, and the national road, even the serviceable parts, was becoming obsolete. But it did serve a useful purpose in teaching Americans this lesson: federally funded transportation is neither a necessary nor a desirable way to fill a continent with settlers.

On May 6, 1939, Henry Morgenthau, Roosevelt’s treasury secretary, confirmed the total failure of the New Deal to stop the Great Depression: “We are spending more than we have ever spent before and it does not work. . . . I say after eight years of this Administration we have just as much unemployment as when we started. . . . And an enormous debt to boot!”

In FDR’s Folly, Jim Powell ably and clearly explains why New Deal spending failed to lift the American economy out of its morass. In a nutshell, Powell argues that the spending was doomed from the start to fail. Tax rates were hiked, which scooped capital out of investment and dumped it into dozens of hastily conceived government programs. Those programs quickly became politicized and produced unintended consequences, which plunged the American economy deeper into depression.

More specifically, Powell observes, the National Recovery Administration, which was Roosevelt’s centerpiece, fixed prices, stifled competition, and sometimes made American exports uncompetitive. Also, his banking reforms made many banks more vulnerable to failure by forbidding them to expand and diversify their portfolios. Social Security taxes and minimum-wage laws often triggered unemployment; in fact, they pushed many cash-strapped businesses into bankruptcy or near bankruptcy. The Agricultural Adjustment Act, which paid farmers not to produce, raised food prices and kicked thousands of tenant farmers off the land and into unemployment lines in the cities. In some of those cities, the unemployed received almost no federal aid, but in other cities — those with influential Democratic bosses — tax dollars flowed in like water.

Powell notes that the process of capturing tax dollars from some groups and doling them out to others quickly politicized federal aid. He quotes one analyst who discovered that “WPA employment reached peaks in the fall of election years. In states like Florida and Kentucky — where the New Deal’s big fight was in the primary elections — the rise of WPA employment was hurried along in order to synchronize with the primaries.” The Democratic Party’s ability to win elections became strongly connected with Roosevelt’s talent for turning on the spigot of federal dollars at the right time (before elections) and in the right places (key states and congressional districts).

Powell’s book is well researched and well organized. His chapter titles are a delight. He synthesizes a mass of secondary sources (and some primary sources) in making a strong and persuasive case that the New Deal was a failure and that the Roosevelt presidency, at least in its first two terms — was a disaster. Powell covers all the major New Deal programs; he draws on the research of historians both “liberal” and conservative; and he is nuanced — this is no hatchet job — in that he concedes that some of Roosevelt’s policies, such as tariff revision, were more economically sound than, say, his industrial and agricultural policies.

FDR’s Folly takes its place on the shelf alongside Gary Dean Best’s Pride, Prejudice, and Politics and his more recent Retreat from Liberalism as liberating revisionist works that challenge the long-standing adulation of Roosevelt given by almost all historians. In the most recent Schlesinger Presidential Poll (1997), the historians and “experts” chosen by Arthur Schlesinger, Jr., collectively ranked Roosevelt as the greatest president in American history, even though every other American president had lower unemployment rates than Roosevelt did for his first eight years in the White House. As late as 1999, David Kennedy won the Pulitzer Prize for a book (Freedom from Fear) that largely praised the New Deal as a legislative program and Roosevelt as its author.

With the dawning of the 21st century, we may be witnessing the final departure of Roosevelt’s loyal academic propagandists and those targeted recipients of his federal largess. In such a climate, Jim Powell has given us, with FDR’s Folly, a refreshing, must-read account of the New Deal.

Causation. The main causes of both crises lie in actions of the federal government. In the case of the Great Depression, the Federal Reserve, after keeping interest rates artificially low in the 1920s, raised interest rates in 1929 to halt the resulting boom. That helped choke off investment. Also, President Hoover signed into law the sky-high Smoot-Hawley Tariff, which stifled trade and damaged American exports throughout the 1930s. Finally, the President signed a large tax increase into law in 1932, which halted entrepreneurship.

The seeds of the Great Recession were planted when the government in the 1990s began pushing homeownership, even for uncreditworthy people, with a vengeance. Mortgage-backed securities built on dubious mortgage loans became “toxic” when the housing market took a downturn, and many American banks verged on collapse. The government’s urgent desire to bail out various banks and corporations created uncertainty and instability, and this may have widened the recession.

Massive federal spending. Presidents Roosevelt and Obama responded similarly to the crises. They talked about balancing the federal budget, but instead resorted to massive spending. Earlier presidents, like Cleveland and Harding, cut spending when the nation was threatened with economic hardship. Hoover was the transition president, running deficits with record spending on public works, the first federal welfare program, and the first large-scale federal farm program. The results were budget deficits and 25 percent unemployment.

President Roosevelt became Hoover on steroids. FDR and his advisers, despite some early moves to cut spending and control the deficit that Hoover left behind, decided that ever-larger federal spending would trigger economic expansion and pull the country out of its economic slump. Thus Roosevelt began the Agricultural Adjustment Act (AAA), which paid farmers not to produce, and then expanded Hoover’s Reconstruction Finance Corporation, which provided bailout money to large banks and corporations. He also expanded spending on public works and targeted large subsidies to various special interests.

President Obama, who often cites FDR, followed his example of targeting spending to interest groups. He signed into law a $787 billion stimulus package that sent tax dollars to various cities and voting groups across the nation. He later supported an expensive “jobs bill” that would send money into key congressional districts. The President also campaigned for a cap-and-trade bill and universal health coverage, both of which promised to increase the federal debt substantially. In fact, the increase in federal debt under Obama and Roosevelt is similar. The national debt more than doubled in Roosevelt’s first two terms, and it is projected to double again in eight to ten years.

Spending fails. After the large increases in federal spending under Roosevelt and Obama, unemployment remained high. In the 1930s unemployment fluctuated, but recovery never occurred. In April 1939, toward the end of Roosevelt’s second term, unemployment was almost 21 percent. Treasury Secretary Henry Morgenthau complained, “We are spending more than we have ever spent before and it does not work.” Nonetheless, almost all of FDR’s programs continued—usually with annual budget increases.

When Obama took office unemployment was at 8 percent, and in the next year it steadily increased to over 10 percent before falling back just under that mark. He and his advisers were puzzled that large spending increases did not slash unemployment, and he argued that his spending was saving jobs that would otherwise have been lost.

Critics of Roosevelt and Obama insisted that it was impossible to spend our way out of a recession. During the New Deal, economics writer Henry Hazlitt observed that public-works spending destroyed as many jobs as it created. “Every dollar of government spending must be raised through a dollar of taxation,” Hazlitt emphasized. If the Works Progress Administration builds a $10 million bridge, for example, “the bridge has to be paid for out of taxes. . . . Therefore for every public job created by the bridge project a private job has been destroyed somewhere else.”

Tax rates raised. During the Great Depression Roosevelt raised both income and excise taxes. In 1935, with FDR’s push, the top marginal tax rate hit 79 percent. Few paid that rate, but thousands of Americans were in the 50-percent bracket. Entrepreneurs had to hand over more than half of any income above a certain level. Facing disincentives to make capital investments, many entrepreneurs used their wealth cautiously—investing in tax-exempt bonds, art collections, and foreign banks. Little wealth went into creating jobs, so high unemployment persisted. During World War II FDR raised taxes further, to 94 percent on all income over $200,000.

Most of the tax hikes under Obama are planned for the future. Thus far we have seen proposed tax hikes on products such as cigarettes, liquor, plane tickets, and soft drinks. He wants the tax cuts enacted under President Bush to expire. That will mean a spike in the capital gains tax, the income tax, and the estate tax. As FDR showed, tax hikes eventually follow large spending increases.

Scapegoats. The sequence of massive federal spending followed by a lack of recovery plus tax hikes is poison for a politician. Therefore Roosevelt sought scapegoats to explain his failure. Wall Street bankers were his favorites. He called them “economic royalists” and blamed them for causing the Great Depression. He also blamed America’s top businessmen for instigating a “capital strike”—they were refusing to invest in order to make him look bad. FDR then launched IRS investigations of key Republicans and used the newspapers to encourage hostility toward these targets.

Obama has followed FDR’s playbook of attacking Wall Street bankers and various corporate leaders. He condemns the raises these bankers sometimes receive and the profits earned by some large oil companies and health insurance companies.

Such emphasis on “class warfare” may be an inevitable part of redistributing wealth from one group to another. Perhaps Roosevelt and Obama believed that by increasing envy and resentment toward some Americans, they could capture the votes of larger groups of Americans and thereby win reelection (in FDR’s case there is evidence of this). True, this strategy guarantees that many wealthy Americans will attack any president who uses class warfare, but the campaign for redistribution will always supply large amounts of money to subsidize favored groups.

When Roosevelt was reelected in 1936 Senator Carter Glass, Virginia Democrat, admitted, “The 1936 elections would have been much closer had my party not had a 4 billion 800 million dollar relief bill as campaign fodder.”

Obama may be hoping his “stimulus” package and his health insurance bill will generate similarly large support among Americans receiving federal benefits and that these voters will go to the polls to overwhelm those who are paying the bills.