Question

As the Great Depression began in 1929, and millions of Americans found themselves in a terrible economic position, President Herbert Hoover was reluctant to involve the government in directly helping people. This decision helped lead to his loss in the presidential election of 1932. Put yourself in Hoover’s shoes—what reasons would he have for being opposed to large-scale government involvement in the economic lives of Americans? What reasons could be given for the government getting involved?

Answer 1

Opposed to government involvement:

America had always been an individualistic nation—government handouts would take away from that.

Hoover believed that the economy would recover on its own.

For government involvement:

Private businesses would not hire people in bad times—government (since it didn’t need to make a profit) could and should get people working and help them out.

Americans were suffering and the national government was the only entity capable of handling such a large problem.

Answer 2

Hoover was a Republican and during the 1920's that meant little government interference with the economy. He was following the common practice of his political party for the time. Also, based on previous panics and recessions, the government didn't have to interfere because the economy  naturally saw booms and busts in the economic cycle. It was believed that this economic bust was a normal decline and with reinvestment by the wealthy the economy would bounce back.

People arguing for government interference suggested that the depression was worse and different than other panics experienced before this. No one was reinvesting in the economy because they had lost too much or were not willing to trust the system. It was argued that government spending was needed to get the economy started again and then the debt the government gained from economic investment would be paid back with increased taxes when the economy turned around.