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BentBow, thank you for pointing out that the much maligned Smoot-Hawley tariff was a Hoover initiative. Right-wingers don't like to mention that. Intellectuals will argue for years whether it caused the Depression (unlikely) or made it much worse, but just about everyone agrees it was bad legislation.
http://static.seekingalpha.com/uploa...l_debt_gdp.jpg From this link. The economy in the great depression didn't recover until the total debt went way down. Borrowing more money doesn't make a debt bubble go away.
The Smoot-Hawley Tariff Act of 1930 which President Hoover supported and signed into law helped to paralyze global commerce. The huge tax increases signed into law by Presidents Herbert Hoover and Franklin D. Roosevelt retarded economic growth, ballooned the national debt, and sunk the nation deeper into the great depression. If Presidents Hoover and Roosevelt had moved to curb over-speculation and otherwise continued the economic policies of Harding and Coolidge, the nation may have been able to have avoided the great depression. Most certainly, the depression would not have been as deep and prolonged as it was
in fact it would have been over in about 18 months. the rest of the world had pretty much recovered from the depression in that time, where as the US took until 1946 to get over the depression.
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despite what our historical elite have professed to us, the economic policies promoted by Harding and Coolidge during the 1920's created a level of prosperity our nation would not see again until the 1980's. It is long overdue for Harding and Coolidge to receive the acclaim they deserve for rescuing America from economic depression and returning it back to normalcy.
agreed
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Originally Posted by mwruckman
Do you know why we could cut taxes and spending about 40% in the early 1920s. Well its easy when you reduce the size of the US Army from 2.5 million men to a about hundred thousand and put most of the Navy in mothball yards and cashier the sailors. America brought the guys home and back to normalcy. This might be a good idea today.
we dont have to cut back as deeply as harding did. in fact a 15-20% budget cut, and cutting out huge amounts of unneeded government regulations and unneeded programs would go a long way to spurring on the economy, and that is without a tax decrease.
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Originally Posted by pvande55
BentBow, thank you for pointing out that the much maligned Smoot-Hawley tariff was a Hoover initiative. Right-wingers don't like to mention that. Intellectuals will argue for years whether it caused the Depression (unlikely) or made it much worse, but just about everyone agrees it was bad legislation.
i always mention that smoot-hawley was a hoover initiative, and i also note that it was bad legislation. it didnt cause the great depression, hoovers earlier attempts did that along with the collapse of the credit markets, but it did prolong the depression, as did the policies of FDR. the difference was though that FDR spent on the infrastructure, which while it didnt end the depression, it did mean that when the depression was over, we had a solid infrastructure to use during the booming economy of the late 40's and the 50's, and to build upon.
http://static.seekingalpha.com/uploa...l_debt_gdp.jpg From this link. The economy in the great depression didn't recover until the total debt went way down. Borrowing more money doesn't make a debt bubble go away.
You misread this chart. There are two ways to make a Debt to GNP ratio go up. (1) You greatly increase the size of your debt and (2) You decrease the size of your GNP. or you do both at the same time. From 1928 to 1933 the large rise in this ratio is largely due to reduction in GNP not borrowing. Hoover's problem is that he didn't spend enough money to keep America's factories and farms producing and earning a profit for their owners. Why do you think they shut them down in the first place. If credit had been flowing freely consumers would consume and there would be demand for goods and services. But no the prevailing wisdom was when markets shrank you cut your losses, cut expenses and shut down money losing operations. By 1933 we hit rock bottom as 40% of the US GNP had vanished along with 30 % of Americas jobs. Now look at the graph from 1933-1940 FDR spent a lot and racked up a lot of debt. Why doesn't the graph keep going up. Well it doesn't because the GNP went way up and by 1937 was nearly back up to 1928-9 level. Also in the 1940s the government spent nearly 2 trillion dollars in todays funding on a little World War which sent the US economy in hyperdrive producting hundreds of thousands of planes, 20,000 Sherman tanks and a lot of the munitions and supplies that not only kept our troops going but those of the British Empire and the Soviet Union. Ypu don't see a spike do you. The US economy during the war years was 2-3 larger than it was in 1937.
From the 1940s to 1981 (end of the Carter Presidency) the US debt to GNP ratio is relatively stable. Because we used credit but we always created enought real economic growth in goods and services to cover the debt. This came to an end in 1981 with the new order of things that switched this nation to a new economy based on hokus pocus and wishful thinking and letting money make money. We let our goods and services be done by the Chinese, Indians, Japanese, Koreans and Germans. We don't even have to print money anymore it is magically conjured up in a digital wizards loom that even we don 't understand. No more hard work or having to invent new products and technologies. That way of making a living is for chumps not for the masters of the universe who can repel any challange with legal BS and flimflam.
You misread this chart. There are two ways to make a Debt to GNP ratio go up. (1) You greatly increase the size of your debt and (2) You decrease the size of your GNP. or you do both at the same time. From 1928 to 1933 the large rise in this ratio is largely due to reduction in GNP not borrowing. Hoover's problem is that he didn't spend enough money to keep America's factories and farms producing and earning a profit for their owners. Why do you think they shut them down in the first place. If credit had been flowing freely consumers would consume and there would be demand for goods and services. But no the prevailing wisdom was when markets shrank you cut your losses, cut expenses and shut down money losing operations. By 1933 we hit rock bottom as 40% of the US GNP had vanished along with 30 % of Americas jobs. Now look at the graph from 1933-1940 FDR spent a lot and racked up a lot of debt. Why doesn't the graph keep going up. Well it doesn't because the GNP went way up and by 1937 was nearly back up to 1928-9 level. Also in the 1940s the government spent nearly 2 trillion dollars in todays funding on a little World War which sent the US economy in hyperdrive producting hundreds of thousands of planes, 20,000 Sherman tanks and a lot of the munitions and supplies that not only kept our troops going but those of the British Empire and the Soviet Union. Ypu don't see a spike do you. The US economy during the war years was 2-3 larger than it was in 1937.
From the 1940s to 1981 (end of the Carter Presidency) the US debt to GNP ratio is relatively stable. Because we used credit but we always created enought real economic growth in goods and services to cover the debt. This came to an end in 1981 with the new order of things that switched this nation to a new economy based on hokus pocus and wishful thinking and letting money make money. We let our goods and services be done by the Chinese, Indians, Japanese, Koreans and Germans. We don't even have to print money anymore it is magically conjured up in a digital wizards loom that even we don 't understand. No more hard work or having to invent new products and technologies. That way of making a living is for chumps not for the masters of the universe who can repel any challange with legal BS and flimflam.
http://www.acus.org/files/u3/USA-GDP-1810-2010.png This shows a reduction in GDP of about 25% in a percapita basis, this gets you a swing of 1/3 in total debt. http://www.bearishnews.com/wp-conten...l-debt-gdp.jpg You are correct that the bulk of the swing in total debt is as a reduction of economic output. About 50% of GDP of the swing between 1930 and 1934 was in new debt thow. There was a debt bubble then but the one we have now is even bigger. What we really need now is a 200% increase in our GDP. That would fix things nicely.
http://www.acus.org/files/u3/USA-GDP-1810-2010.png This shows a reduction in GDP of about 25% in a percapita basis, this gets you a swing of 1/3 in total debt. http://www.bearishnews.com/wp-conten...l-debt-gdp.jpg You are correct that the bulk of the swing in total debt is as a reduction of economic output. About 50% of GDP of the swing between 1930 and 1934 was in new debt thow. There was a debt bubble then but the one we have now is even bigger. What we really need now is a 200% increase in our GDP. That would fix things nicely.
Well you can't say that US companies haven't created tens of millions of new jobs its that they are in places like Bangalore or Shenzhen. US companies add several trillion dollars to the GNPs of places like China or India. Go to Singapore and look at the company names on the industrial plants and you might think you are still in the States. I see a pattern at US companies and we are not alone its happening in Europe and Japan. Take GE, GE has established brands that American consummers trust and are familiar . GE finds it a more effective use of capital (better profits) to market the same products made by a Chinese company like Haier. But people don't want to buy a cheap Chinese knock-off from Haier and GE doesn't want to risk having Haier make a deal with WalMart to knock out GE in the US market. So GE sells the branding rights to Haier and gets the rights to market these Haier made GE appliances in North America. GE makes money, Haier doesn't have to take the trouble and spend money to advertise and penetrate the US market and it makes money. WalMart now gets made in China GE-branded Appliances to sell at the WalMart everyday low prices and it makes money. The only losers are the thousands of former GE employees who now no longer make GE appliances in the American Midwest and may not be able to afford those appliances even at WalMarts everyday low prices. GE makes money here by cutting costly overhead and they were probably IBEW workers anyway. GE isn't the only company making this game the HP computer I am using right know was made in China right down to its HP logo.
The only losers are the thousands of former GE employees who now no longer make GE appliances in the American Midwest and may not be able to afford those appliances even at WalMarts everyday low prices. GE makes money here by cutting costly overhead and they were probably IBEW workers anyway. GE isn't the only company making this game the HP computer I am using right know was made in China right down to its HP logo.
The hole economy is the biggest loser. One can make more money by outsorcing to china all lose money by outsorcing to china. The economy implodes. The bill is coming dew on the debt we have run up.
I have to laugh at the notion that any of the US presidents were in fact leading the charge in things economic. In all the historical accounts of economic actions at the federal government level the sitting presidents are given the thumbs up or down based upon their ability to grow the base of wealth. The true histories are the ones that will openly discuss the actions taken by Wall Street to either grow the credit markets or repair the damage done by by them. The fact that they do these things through the power of the federal government should be all the evidence we need to determine who has the power in America.
The meat that is left for the lower men to chew on is the constant back and forth over which party or president was most effective at putting money in the pockets of the citizens. Truth can be in short supply when we look at the political theatre that passes for history in the public schools of the U.S. After all the arguing has exhausted the energy of the low men they are of little use to themselves in the pursuit of their own interests, and that's the way it's supposed to work, Hoover, Harding, FDR, Truman, and now the latest man from the stables of Wall Street have all served one entity, the bosses that put them in the White House. I've lived under enough presidents to know that none were on my side, and none from the past ever represented the masses in America. It is impossible to even be in the running for president without the blessing from Wall Street, we are a corporatocracy and have been for a very long time.
The hole economy is the biggest loser. One can make more money by outsorcing to china all lose money by outsorcing to china. The economy implodes. The bill is coming dew on the debt we have run up.
Well the modern Global business model is a win-win for its players and why should you let a few million American workers stand between billions in corporate profits -- its UNAMERICAN and even worse SOCAILISTIC. You've no doubt seen those GE commericals where the workers sing heartfelt songs about how they love making jet turbines for GE. GE is starting to make those jet turbines in Shanghai and is setting up a plant to make those big diesel-electric locomotives in China. The Chinese kind of insist that things sold in China be made in China. China will be GE's bigest market for these products and the day is coming when it will make more business sense to service the US market with the production from these Chinese plants. The GE planrs in Covington KY (Jet engines) and Erie PA (Diesel-electric locomotives) won't be needed. Well the GE workers at these plants can sing about how much they love their new unemployment checks.
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