Wednesday, November 26, 2008

The U.S. Depression: Mixing Fact and Fiction

It is often asserted that President Franklin Roosevelt ended the U.S. economic recession. Unfortunately the facts are in conflict with the myth.

The depression began in 1929 with the stock market crash and resulted in the nation’s unemployment rate rising from 4 percent in 1929 to 25 percent in 1933, the year Roosevelt took office. Roosevelt initiated the first New Deal in 1933 with banking reform laws, emergency relief programs, work relief programs, agricultural programs, and industrial reform (the NRA). The first New Deal essentially ushered in a federal welfare state, as well as the end of the gold standard and prohibition. The Roosevelt launched a "Second New Deal" in 1935. This second program included labor union support, the WPA relief program, the Social Security Act, and programs to aid farmers.

Despite the two New Deals and aggressive economic stimuli from the Roosevelt led administration, the U.S. gross domestic product (GDP), which was $104 billion in 1929, did not reach this level again until 1941 with the beginning of U.S. involvement in World War II. Furthermore, the nation’s unemployment rate was over 17 percent in 1939. That jobless rate has not approached that level since.

Now we are to understand that Mr. Obama intends to model his economic stimulus programs according to his mis-readings of the Franklin Roosevelt years. The nation is not willing to suffer anything approaching its Depression experience. Unfortunately, Mr. Obama has unveiled ideas, which if matched by real programs, will result in a prolonged period of negative and slow growth for the country. For example, bailing out GM will result in the waste of taxpayer money and only delay that behemoth dinosaur’s ultimate demise.

Ernie Goss


Anonymous said...

OH my God I actually agree with Ernie Goss.

Now, all we need is some solutions.

Unknown said...

I'm amazed that history can become so distorted by the liberal media.

The last big economic recession of the early 80's wasn't corrected by expanding the government.

Anonymous said...

The government is currently in an opportune position. Investors have flogged over to invest millions and millions of dollars in.....Government Securities!

The government, not business, is in a prime position to borrow funds to spur the economy which the business sector let go by the waste side.

For the record. FDR was getting the economy moving along until the balanced budget group got a hold of him and convinced him to work to balance the budget verses keep the economy growing through governmental programs.