Questions Answered: Part 7
Recently I was asked a series of questions by a journalist wishing to write an article about the nation’s current economic situation. What follows in this article and others following is one of those questions and my answer to it.
How bad is the situation really? Certainly that’s an important factor to consider when judging the costs/benefits of a stimulus package?
The situation is serious but nothing compared to the Great Depression right now. I stress right now, because if the government attempts to follow FDR’s approach in the 1930s, we could see a ten year deep recession. People are uncertain and have real concerns over their financial situation now and in the future. Why was the Great Depression the Great Depression rather than a simple recession – why did recovery take so long? The most important factor was a combination of errors on the part of the Federal Reserve and the hostile attitude that the FDR administration had toward the private sector. Roosevelt said that businessmen as a class were “stupid.” Business leaders sincerely believed that the government was in evil hands…and preparing the way for socialism, communism, or some other variety of anti-Americanism. In 1935, 1936, and 1937 the Roosevelt administration requested tax legislation aimed at punishing the wealthy. This created a business hostility toward Roosevelt and resulted in an unwillingness to invest.
1 Comment »
RSS feed for comments on this post. TrackBack URI
No one talks of the depression of 1920 where government did nothing and America was out in no time.
10 year recession? The depth is already built into the market from years of abuse. Recovery should start around 2010. The question people need to ask? When the depression is over, I believe it will be one and the IMF President says it is already. Do you want an inflation driven economy? That is is working your buns off all week with a raise. Come home and buy the groceries, a pair of pants and wonder where all the money went. Housing and investments are cheap, but no money left over to invest or for pleasure.
Many say gold will go up big time? I agree. If that is true you will be a millionaire but live in poverty from all the abuse of government expenditures. This is what America gets from a government for enjoying their imports, welfare, wars and wasteful spending.
Without government removing it leech sucking tangles from private enterprise wealth. Private enterprise will not be able to make the dollar strong or worth more value again. Thereby prospering the citizens the government oversees. Creating an society of prosperity.
That is why societies of socialism live in poverty is because of government leeches. Government officials living off society. Doing not a thing productive and encouraging others to do the same.
So in reality it is not recovering from a depression. It is a change of life style by government leeches draining the wealth putting the state in constant poverty.