History of the Republican Party
The Republicans trip
During the Roaring Twenties, three successive Republican presidents kept a lid on government spending and taxes: Warren G. Harding (1921-1923), who, according to A Short History of the American Nation, balanced the budget and reduced the national debt by an average of more than $500 million per year; Calvin Coolidge (1923-1929) and Herbert Hoover (1929-1933), who was the last businessman to make the successful transition to president. While Republicans controlled the White House and Congress, the U.S. economy expanded as free enterprise stimulated business and industry. The Republicans' sound money policies brought growing prosperity and steadily cut the federal debt.
In 1929, the Wall Street crash signaled disaster for the Republicans as President Hoover emerged as the scapegoat for the Great Depression. Despite his creation of the home-loan banks and the Reconstruction Finance Corporation to save the American financial structures, Hoover's anti-Depression efforts went unheeded as people turned to the Democrats for a "New Deal."
Under Franklin Roosevelt's New Deal, the federal government gained power and size while deficit spending rose as a result of increased government involvement in the economy.