By: The Common Constitutionalist
Have you ever noticed we’ve had but one economic Depression in our history? Only one, even with all the economic downturns, all the wars, etc. At least only one we’ve all heard of. It was, of course, “The Great Depression”. It was terrible and lasted so long; from 1929 through the early 1940’s.
I’m sure we’ve heard how that great president Franklin Roosevelt (he was a bad dude) saved us by developing all those wonderful programs and spending all that money (we call it stimulus today). As far as most people know it was the only depression this country has experienced.
Oh, by the way, another great progressive president, Woodrow Wilson (evil), presided over the run-up to this one. Two progressive Presidents; two Great Depressions. Funny how that happens and will continue to happen unless we learn from our own history, but I digress.
In 1920 the unemployment rate skyrocketed to 20 percent. GNP (gross national product) had declined by 17%. Not good indeed.
Keep in mind, there was no welfare, Medicare, Medicaid, foodstamps, Social Security, no government assistance programs to speak of. They were a heartless people, back then.
So what did they do, you ask?
Surely, like today, the government must have instituted a massive stimulus program with lots of “ Shovel-Ready” jobs. They must have started a sweeping welfare program to save the people.
Well, no. Instead, the Warren G. Harding administration cut the government budget almost in half within 2 years. Could you imagine even proposing anything remotely like that today? The liberals would hemorrhage.
Anyway, back to history.
Taxes were cut for everyone. The Federal Reserve, without the sage guidance of Ben Bernanke, did almost nothing. It must have been awful.
It was for about a year. What did America do? It fixed itself.
Americans did what Americans do. They took their medicine, endured the pain and by August of 1921 the unemployment rate dropped from 20% to 6.7%. That’s only a year and a half people.
Harding died suddenly and his vice president, The great Calvin Coolidge continued the programs & by the end of 1923 the unemployment rate was down to 2.4%. Dare to dream about 2.4% unemployment. That’s what made the roaring 20’s roar! Not government programs or intervention. Companies were allowed to fail and new ones took there place. Capitalism could thrive in such an environment, and did.
All the lessons are right here for us to learn from. Everything has been tried before. There’s nothing new. History show’s what has worked & what has not. It can’t be spun. Believe me, there will be pain coming, one way or another. We will have to decide whether it will be a quick rip of the bandage (Warren Harding, Calvin Coolidge) with it’s accompanying shooting but short-lived pain or the long slow pull (Franklin Roosevelt, Barack Obama) with it’s constant drawn out anguish. I’m praying for the former, but I fear the latter.