An obscure speech given by Harry Truman on September 11, 1951 at the dedication of the GAO office building is buried deep in the FBI FOIA archives. In it, Truman discusses the budget of 1951-1952, and offers some practical advice to the Paul Ryans of his day and ours.
Now, I would like to say a word to comfort and console those who fear that we are spending our way into national bankruptcy. This alarming thought has some currency in certain circles, and it is used to frighten voters -- particularly as visions of elections dance through the heads of gentlemen who are politically inclined.
I want to say to those gentlemen who are spreading this story, "Don't be afraid." This is something that has been worrying you for a number of years now. It's something you've been saying over and over again. It wasn't true when you began to say it, and it's has not been true as you have repeated it over and over since then, and now it's further from the truth than ever.
He goes on to talk about why the 40% tax rates are strengthening the economy:
The country is stronger economically than it has ever been before. Its people are more prosperous. After paying their taxes, the people have an average per capita income that will buy 40 percent more than it did in 1939, in spite of increases in prices. Corporations are making more money than they ever did and, even after paying taxes at the new high rates, their profits are running at an even higher rate than in any year except the record-breaking 1950.
And finally, he discusses the wisdom of the "paygo" approach to spending:
One of the benefits of using the pay-as-we-go approach is that it results in a tighter check on expenditures. It is so unpleasant to increase taxes that before doing it we try to hold down on expenditures wherever we can. That is the way it ought to be. All I ask is that we do not cut our expenditures to the point where we lose more than we gain. We must not be penny wise and pound foolish. I don't want to lose a horse through being too stingy to buy a strong enough rope to tie him with.
Take heed, Paul Ryan. Those who don't learn from history are doomed to repeat it. Low tax rates and income inequality, combined with speculators and irresponsible Wall Street bankers brought on the Great Depression. Here's a speech from Truman, just at the beginning of what would be one of the most prosperous periods in American history warning you.
Buy the rope, boys.