Found on CNBC: an admission that we might be headed into a Depression. Though the reasons why are “baffling.”
Look. It’s very simple. Keynesian economics don’t work. US government war spending did NOT pull us out of the Depression in the thirties. The depression ended for the US in 1939 (ten years after it began) when manufacturing activity finally turned around. We entered the war on December 7th, 1941. What got us out was spending by other governments — increased demand for goods they were no longer able to produce or just needed more of because of the war.
Though it must be admitted one government jobs program was dramatically successful in increasing employment: sending off our men to war. Of course, a lot of them didn’t come back. But hey, fewer competition for jobs back home – yes?
Let’s not do that again.
A better economics lesson is the Depression of 1921. What? You haven’t heard of it? That’s because it only lasted for one year. Warren G. Harding got us out of it by cutting taxes and spending, over the objections of his Secretary of Commerce, Herbert Hoover.
When Hoover became president, he got his chance to implement Keynesian policies (more government, more taxes, more barriers to trade) and FDR expanded on them. We know how that went — ten years of pain.
We’re doing the same damn things today. And the results are… the same.