Looking to President Coolidge for budgetary perspective

Calvin Coolidge, 30th President of the United States, serving from 1923 to 1929.

Kai Ryssdal: In keeping with the theme of today's broadcast -- tomorrow's economic news today -- we turn now to Congress. Lawmakers are still on spring break. But when they get back to work, I can guarantee you you'll be hearing these two words over and over and over again: debt ceiling.

At a fundamental level, the debate is about the best way to reduce what we owe. By cutting spending, or by raising taxes.

And it got commentator Amity Shlaes thinking about history.

Amity Shlaes: As presidents go, Calvin Coolidge is an unlikely hero. Conservatives focus on him far less than they do on Ronald Reagan, and after all, Coolidge served a long time ago, from 1923 to 1929. Coolidge said "no" so often that he was trashed as lazy even by his own peers. Today, Coolidge is held in such low esteem by most Americans that if they remember anything, it is his nickname: Silent Cal.

But Coolidge did three things that stand out today, especially from our budgetary perspective. The first was to monitor federal spending -- personally, with his own pencil, and intensely. As president, Coolidge met with his budget director every Friday at 10:00 a.m. Once cuts had been made, Coolidge made more. Coolidge monitored every penny spent down to the salt and pepper on the dinner table. The housekeeper at 1600 Pennsylvania Ave., Miss Riley, managed to cut her outlays from $11,667.10 one year, down to $9,116.39 the next. "Very fine improvement," the president wrote in a note to her.

The result was that Coolidge always ran surpluses. In fact when Coolidge left office in 1929, the federal budget was actually lower than when he came in six years before. No peacetime president ever achieved such a thing again. Certainly not Reagan.

Second, Coolidge cut taxes. Silent Cal's top rate was 25 percent, the lowest since World War I ended. And 3 points lower than Reagan's mythic 28 percent tax rate from the 1986 law. Unemployment? Coolidge's average was lower than Ron's.

Save. Match tax cuts with budgetary restraint. Worthy rules. Reagan himself admired Coolidge. It's time the rest of us did too.

Ryssdal: Amity Shlaes is a senior fellow in economic history at the Council on Foreign Relations. If you've got a comment for us about history or about present day, send them in.

About the author

Amity Shlaes is author of the biography “Coolidge,” and she directs the economic growth project at the Bush Presidential Center.
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Comments below take delight in noting that the Great Depression followed shortly after Coolidge left office. So what? The current Great Recession is directly related to 4 decades of accumulated deficits. This is a failure by every Congress and every president. Mostly, it is our fault for letting them get away with it.

I was waiting for the other shoe to drop when the piece ended. So, how did it work out? Eight months after he left office, the Stock Market crash ushered in the Great Depression. The cautionary tale should be 'what not to do'. During good times perhaps we should have higher taxes to regulate and prosecute the stock swindles that were occurring. In addition, it was a time to invest in infrastructure, education, and research in order to sustain a growing economy. Universal public education had just been implemented by all states by 1918. In short, this is incredible revisionist history by a purported scholar. Who needs fiction. Was Philip Roth correct, did Lindberg become President?

I laughed out loud when your commentator wound up her rave review of Calvin Coolidge with "when Coolidge left office in 1929".... 1929. Ring a bell with anybody? Gee. What happened in 1929?

Several commenters so far have claimed that Coolidge's policies led to the Great Depression. Perhaps, but it was Hoover's interventions, attempts to limit the damage and stimulate a recovery, that made what could have been a minor recession a depression. And then Roosevelt's programs kept it going until the war. Coolidge's hands-off policies might have started the downturn, but Hoover's---and especially Roosevelt's---hands-on policies made it into the Great Depression.

Someone please remind the world what happened because of Pres. Coolidge's economic policies on October 29, 1929! This is the man would set up the economy that lead to the great depression.

Why did Ms Shlaes insist on tearing down Reagan. He is dead if she isn't aware. Our current problem is caused by people who are living, the present and past congress and present president.

Perhaps your commentators studies in economic history ended with the Coolidge Administration. The laissez faire , small government,anti-regulation ethos and policies of Coolidge facilitated the speculative bubble of the 20s, leading to the 1929 crash and ensuing Great Depression. Hoover and treasury sectretary Mellon(inherited from Coolidge) merely followed in laissez faire and were completely unable to deal with the new reality of the crisis they helped create. Low taxes on the wealthy, rising economic inequality and a complete failure to regulate led us into our greatest financial crisis. Even though Bush 43 was hardly parsimonious, he seems to be the modern successor to Coolidge in philosophy,policy and results. Bad policy leads to crisis and then deficits


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