"Government is not the solution to our problems," said Ronald Reagan at his first inauguration in 1981, "Government is the problem." Not any more it seems. In the current financial crisis "big government" is suddenly back in fashion. Dinner party conversation every­where is littered with knowing quotations from liberal economists JK Galbraith and John Maynard Keynes. That's good news for Barack Obama, America's most liberal senator, and his "back to the future" vision of a 1930s-style New Deal for America.

This presidential election is not over, but the Democrats, and even many Republicans, believe they have built an unstoppable momentum towards victory in November. CNN, CBS and Fox News focus groups gave Obama a clear edge in the third and final debate with John McCain last week. Given what he actually said, and McCain's consistent attacks (helped by Joe the Plumber) on Obama's liberal positions, that broad support is extraordinary. Overt liberalism has for the last three decades meant inevitable political death. Now the senator from Illinois wears it as a badge of pride, even referencing the 1930s radical Huey Long in his promise to "share the wealth around".

Obama's proposals are led by a vastly expensive Medi-care scheme that will take an estimated 30-50 million people off private insurance. Income, dividends and capital gains taxes on the "rich" will rise. Huge infrastructure projects, such as a "smart" electricity national grid, will be federally funded. Vast sums will be spent on central aid to individual states, on "jobs and growth funds", and on loan guarantees for failing industries (such as Detroit carmakers). Obama believes that government growth can drive economic growth. That's a long way from Bill Clinton's confident assertion as president in 1996 that the "era of big government is over." The New Democrats – not least Bill and Hillary – are out. The old "tax and spend" Democrats are back in town.

In these cruel and unusual times, Obama's message appears to be winning over professional and popular opinion. Economists like it because investment in infrastructure will spur longer-term growth. "Main Street" approves because, in a time of falling incomes, collapsing house prices and rising unemployment, a message of greater social justice resonates. Moreover, with the Democrats set to strengthen their hold on Congress, Obama can realistically say he has the levers to deliver on what he's promised.

But could it really work, with America's economy in meltdown? Every instinct, not least in those who remember the sheer awfulness of the 1970s, says no; history says it might.

In March 1933, Franklin Roosevelt swept into office promising his famous Hundred Days of legislative activity to tackle the Great Depression head on. What followed defined the very notion of big government. Even just reading the list of actions is exhausting. The Agricultural Adjustment Act and National Industrial Recovery Act rightly take pride of place, but an avalanche of other measures included the establishment of a Civilian Conservation Corps, the Federal Emergency Relief Act, the Emergency Farm Mortgage Act, the Tennessee Valley Authority Act, the Truth in Securities Act, the Home Owners Loan Act, the Farm Credit Act, the Railroad Coordination Act and the Glass-Steagal Banking Act.

No American president, with the possible exception of Lyndon Johnson, can claim a comparable record of dynamic, targeted activity in domestic affairs. It was Roosevelt in particular that Galbraith was thinking of when he wrote, "All of the great leaders have had one characteristic in common: it was the willingness to confront unequivocally the major anxiety of their people in their time. This, and not much else, is the essence of leadership."

The Roosevelt era lasted until the election of Ronald Reagan in 1980. The new president thought the nine most terrifying words in the English language were, "I'm from the government and I'm here to help." Now Barack Obama begs to differ.

Prof Richard Aldous

is head of History & Archives at UCD