Cued by Andrew Sullivan, I briefly commented on this subject in the parenthetical conclusion to this post — but the issues raised by Sullivan and his colleague, Megan McArdle, deserve more than that; hence, the following.

To recap: Yesterday, Megan went semi-nuclear on some of her readers who suggested the primary “burden of proof” should be placed on the stimulus opponents rather than its proponents. Au contraire, Megan responded:

… it seems to me that the burden of proof ought naturally to be on the stimulus proponents to satisfy the public that their highly theoretical models are basically sound, especially for the parts of the bill that aren’t tax cuts or transfer payments. Let’s recall that the evidence for this kind of stimulus working in this kind of situation basically rests on a single instance (World War II) — the other two times it was tried (Japan in the 1990s and America in the 1930s) the economy basically rolled along in the doldrums for the rest of the decade.

While I can’t comment in detail on the above-cited history, a book I’m reading on the history of Republican presidents — written by a lifelong Democrat, nonetheless — generally supports Megan’s points about America in the 1930s. To summarize, from pages 186-190 of that book:

Roosevelt was first elected President in 1932. With controlling Democratic majorities in House and Senate, his New Deal proposals were quickly enacted.

Despite the prompt action, “the Depression hung on tenaciously” through the 1934 mid-terms. “Jobless rates did not improve, farm prices remained low, and factory output was less than 50 percent of capacity in some indutries.”

Regardless, Roosevelt was re-elected in 1936 and Democrats expanded their majorities in House and Senate, losing “none of their enthusiasm in the Seventy-Fifth Congress,” even though “the Depression would not go away.”

By the 1938 mid-terms, “the Depression (had) abated hardly at all, and voters showed mild dissatisfaction by punishing the incumbent Democrats, who lost seven Senate seats and a hefty eighty in the House.”

Megan anticipates one counterargument to this history, namely that the various New Deal stimuli didn’t work as intended because they were too little too late. The other counterargument, of course, is that the New Deal might not have improved matters, but without it, the Depression would have been even worse.

Both arguments, using Megan’s words, are anchored in “a belief in the virtues of stimulus that is essentially non-falsifiable.” She concludes: “We might as well move macroeconomic policy to the Office of Faith-Based Initiatives.”

I view the matter through a simpler, less-informed, and potentially less cynical lens than Megan. In short: Provable or not, and despite discouraging precedents, it’s probably better in the current circumstances to do something major than something minor or nothing at all — which is essentially what David Leonhardt argues in his column in the print edition of today’s New York Times. Of course, Leonhardt cites experts, data, and other points of reference to bolster his case, while I favor bold action for a more pedestrian (and yes, less verifiable) reason, namely: the benefits of action vs. non-action on our national psychology.

Though his policies did little discernible good in the 1930s, it seems Americans took a certain, substantial solace from Roosevelt’s insistence that government at least try to help. They clearly preferred someone who acted with bold confidence — successfully or not — over anyone who recommended inaction or middling action. Why else would Americans elect Roosevelt their President a (now-unbreakable) record of four times, including twice after they began to boot Democrats out of Congress?

Translation: To “survive” the Great Depression, Americans in the 1930s didn’t want someone telling them they needed to buckle down and weather the storm and nothing more. They wanted someone telling them — and showing them — that, while they were buckling down, their government would be doing everything it could imagine to help. That’s what many Republicans are missing in their assessment of the current situation, I fear: The national psychology requires government action, right or wrong.

On the other hand, given the unknowables of such action — i.e., given the significant chance that any action could be ineffective (or worse, counter-effective) — some compromise on the major components of the experiment (e.g., the magnitude of individual and corporate tax incentives vs. public works) would be wise. Fortunately, for those who favor major-component compromise, as I do, that outcome now appears likely.