A small army of economists warned Congress on Thursday not to focus on deficit reduction instead of job creation or else risk a 1937-style double-dip recession.

"History suggests that a tenuous recovery is no time to practice austerity," says a statement signed by more than 300 economists and policy experts. "In the Great Depression, Franklin Roosevelt's New Deal generated growth and reduced the unemployment rate from 25 percent in 1932 to less than 10 percent in 1937. However, the deficit hawks of that era persuaded President Roosevelt to reverse course prematurely and move toward budget balance. The result was a severe recession that caused the economy to contract sharply and sent the unemployment rate soaring."

Democrats in Congress have had 1937 in mind since March 2009. "We're not going to let it happen again," vowed House Speaker Nancy Pelosi (D-Calif.) at the time.

Nevertheless, deficit hawks dominated the debate in Congress this summer as Democratic leaders struggled to reauthorize a series of programs created by the 2009 stimulus bill. Pelosi and her counterparts in the Senate have had seemingly little choice other than to sacrifice things like COBRA health insurance subsidies and enhanced unemployment benefits to win the support of deficit-hawkish Democrats and moderate Republicans.

"This is about a high road to recovery versus a low road to fiscal balance," said Bob Kuttner of the American Prospect and co-author of the statement, along with the Center for Economic and Policy Research's Dean Baker and the Robert Borosage and Roger Hickey from the Institute for America's Future. "The proper sequencing is: You get the recovery first, that requires increased public investment. And then the road to fiscal balance is much less arduous because people are working, businesses are investing, and tax revenues go up because you're back in recovery.

"There is also a low road to fiscal balance, where you have austerity and you get the budget balanced at the cost of whacking the real economy."

Click HERE to download a PDF of the report.