The New Deal was the largest real-world test of the Keynesian Myth in recent history. Franklin Roosevelt's Treasury Secretary Henry Morgenthau confessed that the "New Deal" was a failure in sworn testimony before Congress on May 9, 1939.
"We have tried spending money. We are spending more than we have ever spent before and it does not work."
And FDR's Treasury Secretary also told Congress:
"I say after eight years of this Administration we have just as much as when we started. ... And an enormous debt to boot!" (See: Human Events http://www.humanevents.com/2009/01/20/get-over-it-new-deal-didnt-do-the-job/ and The Heritage Foundation http://blog.heritage.org/2009/01/14/were-spending-more-than-ever-and-it-doesnt-work/.)
What's more, Morgenthau was a friend and ally of FDR's, not just the Treasury Secretary responsible for the finances of the New Deal.
Morgenthau made this "startling confession," says historian Burton W. Folsom Jr., in the New Deal's seventh year. "In these words, Morgenthau summarized a decade of disaster, especially during the years Roosevelt was in power. Indeed average unemployment for the whole year in 1939 would be higher than that in 1931, the year before Roosevelt captured the presidency from Herbert Hoover," Folsom's book is "New Deal or Raw Deal?: How FDR's Economic Legacy Has Damaged America."
Top economists show us that the government cannot expand the economy through deficit spending because borrowing disrupts and displaces other economic activities, including Milton Freedman, E. Cary, John Taylor of Stanford, Gary Becker and Eugene Fama of the University of Chicago and Greg Mankiw and Robert Barro of Harvard. In the end, the government simply moves economic activity around (benefitting campaign donors) without any real improvement. As economist Hal Varian of the University of California at Berkeley points out, private investment in the economy builds a foundation for long-term, sustainable growth and prosperity, whereas government spending does not.
When political cronies benefit, honest business building is demoralized and discouraged. Economic growth is harmed by liberal meddling and government disruption of the private sector.