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FDR: From Budget Balancer to Keynesian

FDR found these arguments compelling in the wake of the Recession. In his Annual Message to Congress on January 3, 1938, President Roosevelt declared his intention to seek funding for massive government spending without tax increases, and he challenged fiscal conservatives who offered no compelling alternatives during that time of national economic crisis:

We have heard much about a balanced budget, and it is interesting to note that many of those who have pleaded for a balanced budget as the sole need now come to me to plead for additional government expenditures at the expense of unbalancing the budget. As the Congress is fully aware, the annual deficit, large for several years, has been declining the last fiscal year and this. The proposed budget for 1939, which I shall shortly send to the Congress, will exhibit a further decrease in the deficit, though not a balance between income and outgo.

To many who have pleaded with me for an immediate balancing of the budget, by a sharp curtailment or even elimination of government functions,

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“Only Thing We Have to Fear Is Fear Itself”: FDR’s First Inaugural Address
Franklin D. Roosevelt had campaigned against Herbert Hoover in the 1932 presidential election by saying as little as possible about what he might do if elected. Through even the closest working relationships, none of the president-elect’s most intimate associates felt they knew him well, with the exception perhaps of his wife, Eleanor. The affable, witty Roosevelt used his great personal charm to keep most people at a distance. In campaign speeches, he favored a buoyant, optimistic, gently paternal tone spiced with humor. But his first inaugural address took on an unusually solemn, religious quality. And for good reason—by 1933 the depression had reached its depth. Roosevelt’s first inaugural address outlined in broad terms how he hoped to govern and reminded Americans that the nation’s “common difficulties” concerned “only material things.”
Please note that the audio is an excerpt from the full address.
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Franklin D. Roosevelt: Domestic Affairs
FDR's mandate as a first-term President was clear and challenging: rescue the United States from the throes of its worst depression in history. Economic conditions had deteriorated in the four months between FDR's election and his inauguration. Unemployment grew to over twenty-five percent of the nation's workforce, with more than twelve million Americans out of work. A new wave of bank failures hit in February 1933. Upon accepting the Democratic nomination, FDR had promised a "New Deal" to help America out of the Depression, though the meaning of that program was far from clear.
In trying to make sense of FDR's domestic policies, historians and political scientists have referred to a "First New Deal," which lasted from 1933 to 1935, and a "Second New Deal," which stretched from 1935 to 1938. (Some scholars believe that a "Third New Deal" began in 1937 but never took root; the descriptor, likewise, has never gained significant currency.) These terms, it should be remembered, are the creations of scholars trying to impose order and organ