In the last few years, I have noticed an uncanny similarity in the financial instability of the United States today, and the years before Black Friday of 1929. It started well before Barack Insane Odimwit took the reins of the gumupment into his totally incapable hands, but has galloped forward rapidly since his ascendency. I read an article this morning I would like to present it here for your consideration, and comparison. The cause seems to be in place. Will the effect be just as devastating ? I think , when—— not If —— it happens, 1929 will look like a Sunday School picnic .
The Real Story About What Ended the Great Depression (Hint: It Wasn’t the New Deal) Stephen Moore http://dailysignal.com/2014/09/28/new-deal-end-great-depression/?utm_source=heritagefoundation&utm_medium=email&utm_campaign=saturday&mkt_tok=3RkMMJWWfF9wsRonsqXJZKXonjHpfsX57eQrW6K2lMI%2F0ER3fOvrPUfGjI4DRMdgI%2BSLDwEYGJlv6SgFQrLBMa1ozrgOWxU%3D Ask nearly anyone over the age of 80, and they will say that FDR cared about the working man and “gave the country hope,” a point that Mr. Burns emphasizes. Roosevelt exuded empathy, which isn’t a bad thing—remember Bill Clinton’s memorable line “I feel your pain”?—but caring doesn’t create jobs or lift gross domestic product. http://www.washingtontimes.com/topics/franklin-roosevelt/
Nor does spending government money revive growth, despite the theories put into practice by the then-dean of all economists, John Maynard Keynes. Any objective analysis of these facts can lead to no other conclusion. U.S. unemployment averaged a rate of 18 percent during Roosevelt’s first eight years in office. In the decade of the 1930s, U.S. industrial production and national income fell by about almost one-third. In 1940, after year eight years of the New Deal, unemployment was still averaged a god-awful 14 percent Think of it this way. The unemployment rate was more than twice as high eight years into the New Deal than it is today, and American workers now are angry as hornets. Imagine, if jobs were twice as scarce today, the pitchforked revolt that would be going on. This is success?
Almost everything FDR did to jump-start growth retarded it. The rise in the minimum wage kept unemployment intolerably high. (Are you listening, Nancy Pelosi?) Roosevelt’s work programs like the Works Progress Administration, National Recovery Administration and the Agricultural Adjustment Administration were so bureaucratic as to have minimal impact on jobs. Raising tax rates to nearly 80 percent on the rich stalled the economy. Social Security is and always was from the start a Madoff-style Ponzi scheme that will eventually sink into bankruptcy unless reformed.
The most alarming story of economic ignorance surrounding this New Deal era was the tax increases while the economy was faltering. According to economist Burt Folsom, FDR signed one of the most financially devastating taxes: “On April 27, 1942, he signed an executive order taxing all personal income above $25,000 [rich back then] at 100 percent. Congress balked at that idea and later lowered it to 90 percent at the top level.” The New Dealers completely ignored the lessons of the 1920s tax cuts, which just a decade before had unfurled an age of super-growth.
Then there was the spending and debt barrage. Federal spending catapulted from $4.65 billion in 1933 to nearly $13.7 billion in 1941. This tripling of the federal budget in just eight years came at a time of almost no inflation (just 13.1 percent cumulative during that period). Budget surpluses during the prosperous Coolidge years became ever-larger deficits under FDR’s fiscal reign. During his first term, more than half the federal budget on average came from borrowed money.
The cruel irony of the New Deal is that the liberals’ honorable intentions to help the poor and the unemployed caused more human suffering than any other set of ideas in the past century. Links to articles : http://en.wikipedia.org/wiki/Great_Depression_in_the_United_S…http://www.forbes.com/fdc/welcome_mjx.shtml http://www.washingtonsblog.com/2014/06/pulitzer-prize-winning… http://www.pbs.org/wgbh/americanexperience/features/timeline/…