By: Laura Meyers
1. The Great Depression Was Because of Capitalism
It makes sense that mandated, public school systems propped up by the state would tell you that the reason the Great Depression lasted so long and was so detrimental was because of evil capitalism- not, in fact, the government itself.
But in reality, the Great Depression was so great because of intervention. The Great Depression was not the first depression in American history, and most that preceded the Great Depression were over and done in just two short years. The crash of 1929 lasted at least three times longer than any previous recession because the government compounded its initial errors with a series of additional and harmful interventions.
2. The Feds Were The Good Guys
Actually, you can thank the Federal Reserve for motivating the fall of the economy in 1929. In 1913, President Woodrow Wilson signed the Federal Reserve Act into law, and a decade and half later, the Fed was raising interest rates and choking off the money supply as they increased the discount rate for member banks’ loans four times. Furthermore, they deflated rates even further by selling government securities for months after the crash. If the free-market really had “self-destructed” as the Keynesians tend to claim, hard times would have only ensued for only a couple of years rather than a decade and a half.
3. President Hoover Was a Free Market Guy that Set Us Up to Crash
In fact, one of Franklin Roosevelt’s top aides later said that, “practically the whole New Deal was extrapolated from programs that Hoover started.” Even more, when Roosevelt ran against Hoover in 1932, he grilled Hoover for spending and taxing too much, racking up the national debt and killing trade. Roosevelt’s vice presidential running mate said that Hoover was, “leading the country down the path of socialism.” Started with a free market now we’re here. Not to mention the Smoot-Hawley Tariff Act, passed in 1930 in an effort to stimulate American agricultural economic growth, which virtually closed the borders to foreign goods and ignited an international trade war and led to commodity prices skyrocketing upwards of 30-60 percent. Not to mention the thousands of farmers that went bankrupt and fell out of work. Thanks Obama.
4. The New Deal Was The Only/Best Solution
Before Roosevelt was sworn in as president, he campaigned on a platform that promoted a 25 percent reduction in federal spending, a balanced federal budget, a sound gold currency “to be preserved at all hazards,” the removal of government from areas that belonged more appropriately to private enterprise and an end to the “extravagance” of Hoover’s farm programs.
But like many politicians, his intent and reality were very different from each other. With “nothing to fear but fear itself,” Roosevelt went back on all his promises and expanded and created coercive government programs that would forever redesign the economic layout of America.
Dr. Hans Sennholz of Grove City College says it was FDR’s policies that were to fear: “In his first 100 days, he swung hard at the profit order. Instead of clearing away the prosperity barriers erected by his predecessor, he built new ones of his own.”
5. The United States Is Better Off Because of The New Deal
So happy to be paying my payroll taxes out of my already-minimal paychecks into Social Security; an investment that I will most likely never see the return on. That’s fair, right? The financial crisis in 2008 should be a loud wake-up call. The government left a trail of fingerprints all over the crime scene and housing crisis, with the Federal Reserve revving up the money supply, expanding at insane rates, and risky loans were handed out like candy thanks to cash liquidity from endless printing of money. Now we only have to look to the student loan bubble- brace, and wait for the pop.