Today the United States House of Representative voted to increase the national debt limit to $14,294,000,000,000 by a 217-212 vote. All the “ayes” were Democrats, even after the election of Scott Brown.
What’s going on here? Was this a mass act of seppuku? Or perhaps they are lemmings, taking the plunge ensemble off some Alaskan cliff. Yes, I know lemmings don’t really do that, but still… Don’t these people have children and grandchildren? Don’t they have a clue what they are doing? Or is this just to placate LaPelosa or some fat cat union boss making 700K a year? I have got bad news for them, keep up this way and it doesn’t matter what you’re making. We’re all going off that cliff together.
Whether or not you believe the authenticity of Treasury Secretary Henry Morgenthau’s quote of 1939 – “We are spending more money than we have ever spent before, and it does not work. After eight years we have just as much unemployment as when we started, and an enormous debt to boot” – the substance is true. The New Deal made the Depression worse – and we are doing it again, only with bigger numbers and more zeros. Furthermore, now the Chinese own us. We enact this nonsensical budget and we might as well give them the whole thing – the Statue of Liberty, McDonald’s and Apple Computer. No backsies. They can have Steve Jobs’ next iPad extravaganza in Shanghai. They build everything over there already anyway.
But unfortunately this is no joke. The passing of this budget is a straight out act of economic insanity. Everyone knows it. The 217 Democrats who passed it surely know it too. Only they are too corrupt to face it honestly. Shame on them. Shame on them. Shame on them.
Shame on them. Shame on them. Shame on them.
Unfortunately, they have no shame.
Love your work but you misspelled “Morgenthau”
What do you expect? Their Messiah is a man whose moral compass had him turning tricks for a slumlord…and that was just his first baby steps in politics.
My wife just came in the office and looked over my shoulder at your essay title… “One can only pray!!!” she said while holding up her crossed fingers.
I guess in a perfect world the Libertarians and the Republicans would be arguing over how small the government should be, and compromising on the issues in that direction.
But until then… we suffer.
R/The Mighty Fahvaag
It’s not their money. Congress is largely insulated from the cares of daily living. Speaker Pelosi and her family travel in military aircraft at the expense of us (you and me). They have perquisites of office which insulate them from reality. They live in a cocoon (Washington DC).
Why does November seem to be getting further way rather than closer every time I read a headline from D.C.??
We are witnessing Keynesian economics at work. The Second Time. A catastrophe for the citizenry, but a bonanza for venal politicians and special interests. What is anyone going to do as long as the US Supreme Court continues to support the New Deal Constitution over the Founder’s? It’s all perfectly legal – and extremely politically profitable.
The economic doctrines of Hayek and Mises are the best way to go to create wealth for the general population. However, a cynical member of the “elites” may be far better off to jump on the Keynesian bandwagon. This will most assuredly guarantee them a large salary and incredible power. The free market option is much riskier. The Democratic Party is totally committed to Keynesianism. It knows nothing else. These politicians are existentially committed to this madness even if it proves suicidal. They feel it is impossible to reverse course.
Many Americans have yet to realize the extent of the Democratic Party’s radicalism in both economic policy and defense issues. It’s so called moderates have either been pushed out the door—or effectively marginalized. The Republicans may leave much to be desired. Still, they are the only party in town.
Their idea is to redistribute as much of our money as possible to themselves and their supporters while they still have the chance, and let the consequences fall on others later.
But what ELSE they could do? Refusing to raise that debt limit would cause IMMEDIATE financial meltdown! Making that rise now at least delay that meltdown few more month later because (REMEMBER!) the spiral is constantly accelerating!
What is the solution? Gold standard! So governments (central bankers) would have no opportunity to manipulate (create out of thin air) money as such, EVER! The longer any discussion about the nature of money is delayed and out rightly evaded, the bigger peril it will be in the future!
Congress doesn’t have the fiscal responsibility of a spoiled 13 year old girl given free reign with her daddy’s platinum credit card.
My guess is that it’s not just that Washington and the Dems are isolated from the public. It’s also that no one in the public really cares about this sort of stuff. The Dems have pretty successfully blamed the banks for last year’s financial melt-down. No one can imagine, or cares, that eventually this money is going to have to be paid back. When the bill does come due, everyone’s going to say “tax the rich” in unison, as if that will work and solve all the problems. It won’t, of course, but they’ll never notice, even as the we all go right off the cliff.
This congress recognizes that a year ago we were on the brink of economic ruin. Over the past year they have decided to take a new direction and cut taxes, cut spending and pass a responsible budget that will protect our citizens, defend our country and cut spending. Like health care reform, republicans once again have decided to be the party of “no”. Short term, ..this tactic looks good, but long term, even if …if the republicans once again become the majority in a few years…they will have to “come around” and stand up for something. Saying no is not leadership….. nuff said.…
#10 is absolutely correct. They are stealing as much as they can to pad their live’s.
But as they turn us into a third world, they will have to get use to living behind high walls. a lot of money but little breathing room. always looking over your shoulder.
My only prayer is that people actually wisen up.
It appears they are indifferent to an election putting them out of office because they are promised a featherbed in the civil service or they intend to steal the next election (SEIU–ACORN) or not have one.
How, under the sun, are we ever going to pay back 14 TRILLION dollars?????????
John McCain – How do YOU plan to pay back 14 TRILLION dollars?????
Is this the final nail in our national coffin? Are we assured to be destroyed? Is there some way out?
Please, somebody put a penny on the tracks and derail this runaway government!
It keeps coming back to the same awful question: are they really this stupid or are they really this evil?
Bubblehead -
It’s not 14 Trillion dollars……it’s 14 Trillion, 294 Billion.
Hey, at least they didn’t vote to raise the limit to 14 Trillion, 295 Billion! I mean, THAT would be just GROSSLY irresponsible……
read #14 POOR (no wonder0 Citizen above, and the answers to your questions Meryl are – YES and YES.
as the ship sinks slowly in the east [china - iran] the band on the Lusitania keeps playing.
“seppuku” is neocon code for “black.” You are a racist bigot.
Good work Roger.
The question remains:”Do we have to pay this?”
If this “Rat Race” end at the edge of a cliff,why join the race?
Don’t accept the promotion,spend less.Cut some things out of your life.
Have a cookout in your backyard with your family,friends or *GASP* your neighbors.
Live simple and enjoy the benefits of less stress in your life,and laugh when you see
how much less the taxman takes from you.
Go John Gault.
You know, maybe I’m a bit behind the times but is there actually a republican plan for reigning in spending? I’m talking about actual balanced budget stuff. My fear is that the dems are going to lose the government, the republicans ride to the rescue and continue to spend at deficit rates, even if it less than the dems. I want balanced budgets and debt reduction through decreases in government spending. I’d like to see across the board cuts if possible. Im really afraid the republicans will get into power and immediately show up with the same rhetoric that the dems use, that “you can’t budget the government the same way that you can budget a household” and that any such sentiments are juvenile.
Well I’m here to say, for one, that anybody who says that the government cannot live within its means really doesnt want the government to live within its means.
@22. Alice Wigglebotton
It means Ritual Suicide. And from the context that is precisely what he meant.
http://www.urbandictionary.com/define.php?term=seppuku
I think you owe him an apology for yo
@22. Alice Wigglebotton
It means Ritual Suicide. And from the context that is precisely what he meant.
http://www.urbandictionary.com/define.php?term=seppuku
I think you owe him an apology.
The New Deal made the Depression worse?
This neo-con fairy tale has been quite thoroughly tarred, feathered and ran out of town.
I’m surprised to see it reappear here.
Meryl: the choices aren’t limited to only stupid or evil; some are both stupid AND evil, some don’t have enough intelligence to be considered even stupid – their intelligence is so low it doesn’t even reach the level of stupidity, and others yet are kamikazi/suicidal evil, as Simon points out.
The only problem with the kamikazi/suicidal evil ones is that they are bound and determined to take the rest of us down with them.
FIRE CONGRESS!
Perhaps in the grand mad king scheme of things, congress hopes to pay it all back by:
1. Winning the next election and raising taxes
2. Making us all unionized fed. employees and taxing
3.Printing more and resetting the decimal and taxing
4.Taxing
5.Explaining the necessity of spending and taxing more which includes raising their own pensions
6.Perhaps taxing everything in sight, including a breathing tax, tax-tax, and VAT.
7. Winning the Chinese lottery.
There is no analysis for insanity.
25. Well it certainly didn’t help. In case you didn’t notice, the economy was still in depression until WWII.
24. I’m not sure if you’d call it a Republican plan, but there is H.R. 25, The Fair Tax Act. It’s a total revamp of the tax system, converting it from a hodgepodge of primarily income taxes into a single national sales tax. This streamlining of the system would cause a surge of economic growth. Everything else is obvious- allow energy exploration and development and get rid of the bailouts.
I don’t think there are lemmings in Alaska. Maybe Norway.
“The 217 Democrats who passed it surely know it too.”
You would first have to assume that they were intelligent enough to understand basic economics. All they know is survival, as they define it.
Actually, Lefty, The New Deal did in fact make the Depression worse. More accurately, because of FDRs absurd ‘experiments’ which resulted in considerable uncertainty for businesses, economic expansion was virtually halted.
However, the New Deal wasn’t necessarily the biggest problem: the Smoot-Hawley tariff did enormous damage, and was likely the straw that broke the banks.
FDR was fully as clueless about economies as Obama is. Both are complete economic illiterates.
Roger asks, “Don’t they have a clue what they are doing?” That is in fact the case. They don’t have a clue. Talk to any Democrat, not just a congressional or senatorial Democrat, and you’ll learn quickly enough that they don’t have a clue about economics. These people don’t believe these debts to other nations must eventually be paid off. The handful of Democrats I’ve know who did have a clue can’t explain why they remain Democrats, and their number is so small they are statistically insignificant among the entire body of Democrats.
Over the past year they have decided to take a new direction and cut taxes, cut spending and pass a responsible budget that will protect our citizens, defend our country and cut spending.
Is that stuff you are smoking legal ?
I can remember when the debt was brought up, hacks would say we only owed it to our selves. I suppose with China now, that’s out. Are softy, support the worker lefty types comfortable with poor, oppressed Chinese workers supporting relatively wealthy Americans?
By the way, unfunded mandates are totaling like 100 trillion dollars.
To paraphrase Forrest Gump . . . Shameless is as shameless does.
Henry Bowman @ #32
Amen, brother.
#35 Mike K: “Is that stuff you are smoking legal ?”
It doesn’t really matter much. If you forget to take it out of the plastic bag before you light up, you’re going to be having hallucinations.
It’s not 14 trillion –we picked up Fannie & Freddie too –add 6 and make it 20 trillion. Plus the budget counted in rcpts from cap n trade –which unless we are to be even in worse shape for it, we won’t get.
It will be called the Obama Plunge….
http://winwithjmc.com/archives/158
It is easier to understand the panic in Washington when you realize that it is now, at this moment, impossible to satisfy the core promises of Liberal government. Trillion dollar deficits are unsustainable and crippling, yet that is what the government has already promised.
The push for health care reform is motivated by our current financial disaster from all government promises. Congress has promised Medicare, Medicaid, Prescription Drug, and Social Security services over the next 75 years that are underfunded by $88.6 trillion ($88,600 billion) in curent dollars. Our current yearly production is about $14 trillion.
The public discussion of health care is about the burden of $1 trillion ($1,000 billion) in extra taxes over 10 years. The true shortfall is 12 times as much, more than $1 trillion per year.
The Democratic “solution” to this political and economic problem is to put everyone into one medical care pot. We would all get equal amounts of services at whatever high tax rate the government can levy. The young must be coerced into this system, to extract as much money as possible to serve the old.
Our politicians want to obscure their part in this disaster. Or, at least delay the day of reckoning until they can leave office with more money, even if this makes the eventual collapse worse.
Obamacare Bails Out Medicare
Joke: We lose money on every patient, but we plan to make it up on volume.
I think this is funny, but ObamaCare proposes it as a plan.
Obamacare Bails Out Medicare
The housing and financial collapse was a $3-4 trillion loss to the economy. An underfunding of $88 trillion is unimaginable.
Lefty: The New Deal made the Depression worse? This neo-con fairy tale has been quite thoroughly tarred, feathered and ran out of town. I’m surprised to see it reappear here.
Well, lefty I’m surprised to see an economics ignoramus post your words here.
Did anyone pay a price for doing this to America in the ’30s? No. Can’t remember a single name except Keynes himself, who, when asked “But won’t we be in trouble in the long run?” answered, “In the long run, we’re all dead.”
He was right. They are all dead and we have inherited the bankrupt end to the false dreams of Social Security and the Great Society. Bankruptcy.
Pelosi and Reid and Obama will not be remembered for their evil deeds.
Heck, FDR got us here and he has a four-winged monument on the National Mall glorifying his failures–a wing for each of his four terms.
Obama will laugh to the bank, continue partying every three days and eat cake as we crumble, safe behind their walls.
Nobody pays for failure. At worse, they retire on full pension and live the good life.
Any budgetary shortfall will be made up by transferring funds from the Congressional Pension Fund. when pigs fly
The real shame is the electorate who keeps returning these clowns to office. Only when they become educated and stop looking for the free lunch can we as a country move forward………
I wouldn’t mind them taking a swan-dive into a cement pool if they first unchain the rest of the country before walking the plank.
The Democrats remind of feral children with their parent’s credit card; they have completely lost all control & given into their own selfish darker instincts. Never mind the bill when it is time to pay. They are committing career suicide.
er um… it ain’t just suicide: it’s genocide: if the left succeeds they will detroy us all.
Lefty,
By all means, enlighten all of us doubters with your tar and feathers. If anything good has come out of Obama, its the reevaluation of FDR and the recorded “lefty revisionism” of history.
“And I, for one, welcome our new Chinese Communist overlords”
It doesn’t make sense to the rest of us, but it makes enormous sense to Democrats that Obama wants their votes for dangerous spending bills that will put them out of power in November and turn O into a White House recluse. The Dems don’t believe a word of it. They are on a trajectory to crash and burn with no possibility that they will rise Phoenix-like from the ashes of their own immolation and retake their rightful place as the owners of the Federal government. It’s all a plan, you see, carefully scripted and tailor-made. The likelihood is that they will be returning to Washington as lobbyists, not as heroes, and their hero, Obama, might as well be gone since no one—at least no one in their right mind—will stand put and listen to another of his teleprompter inspired assaults on reality.
The New Deal plus the Smoot-Hawley tariff did, in fact, make the Depression worse and prolong it, primarily by making business uncertain about what was going to happen and therefore cripplingly conservative and by sucking the basic capital out of the system.
Lefty is merely echoing the latest Progressive circular lie. If you pester him enough he will give you a link, which will lead to an interconnected set of “references” that all point back at one another, congratulating one another that the scholarship has been “debunked”. You will not find the debunking itself, because it does not exist.
Regards,
Ric
46. If we could do that, we wouldn’t need to. Fact is that you could eliminate all compensation to members of congress and it wouldn’t be a drop in the bucket. It’d be a nice gesture though.
Less than ten months from now we will see what happens to these guys. Currently they are retiring or opting out as prospects for them are looking dimmer by the day, but in November I believe we will see many Democrats currently in office gone from the picture. I can’t wait till the night of the elections to see the results and believe they will be most surprising especially for Obama (the worst president ever) and his crappy administration!
@ #27 “Lefty” (which is likely not a measure of his handedness)
Lefty isn’t very old, nor is he very bright if he is fairly old. That truism Lefty, predates the “neo-cons” by quite a few decades. In fact, it’s been around pretty much since the end of the 40′s and there are possibly some that were saying it pretty much as early as 1942 or so as it became obvious when the US geared up for WWII, massive employment in the armaments programs, a decided lack of WPA “make work” efforts including post offices and schools that replaced functioning post offices and schools.
That so few on the left have learned any history of that period is one of the few thing’s that we can all decry. They just got “Left” out of the educational process when it became obvious that their teachers couldn’t pound any larnin’ into ‘em.
Congress has been dancing all over my trigger for months. They finally hit the sweet spot.
Among other “fabulous” idea of the New Deal was the notion to tax businesses in such a manner that they could not accumulate capital. (I forget the details.)
And when you can’t do that, you can’t buy new equipment and expand. And that’s one of many evil effects of the New Deal.
poorcitizen:
“cut taxes, cut spending”
In what reality? Not this one.
They know they are finished.
They are stealing as much as they can in meantime.
There are two unanswered questions that need answers before we can save ourselves.
1. What are our priorities?
2. How much of our lowest priorities do we need to cut to become fiscally responsible.
Any incumbent who cannot or will not answer question 1 is too incompetent or too dishonest to re-elect. The answer to question 2 once you have answered question 1 is mechanical, almost simple. You cut enough each year so that our creditors will keep on lending and you put us on a glide path to true prosperity where we actually fund our needs out of our own national income without borrowing. a 10% cut off the bottom yearly until we start retiring debt should do the trick nicely.
Set the whole thing up so that everybody has to have skin in the game by providing ratings and you’re going to have the basis to create a BRAC like process where the least important stuff gets cut and the most important stuff gets preserved. Mistakes in the ratings turn into fodder for challengers at the next elections.
It’s entirely obvious that this is the way out, that it’s workable, and that the current crop of politicians are not interested in doing it.
myth buster – Wait, the economy grows around 10% a year and unemployment decreases from a whopping 26% to 14.6% (the second greatest change in unemployment in the history of the presidency) during FDR’s first two terms and you’re arguing that didn’t help?
Does water run uphill where you live?
Henry Bowman – Private investment under FDR rebounded to it’s pre-Depression level by 1937. Sounds like someone was investing in business under Roosevelt.
They are acting ( behaving ) as if they won’t have to stand for re-election this November. I wonder why?
Setting the stage for something that’ll make the French Revolution look like a…(cough)…tea party.
#32 Sandi: The 217 Congress critters understand basic economics all right — dip hand into cookie jar, remove, enjoy, and repeat. That worked so well for them they decided to stick BOTH hands in this time around. It’s like an all you can steal buffet.
65. I think they’re simply delusional. They think they will be reelected BECAUSE they’re doing these things, not in spite of it. They’re doing the only thing they know how to do, and as it backfires, all they can say is, “Do more of it.”
A more modern example of Lefty’s logic with respect to FDR’s New Deal:
DOW at 14,200. DOW drops to 6,500 in 18 months. DOW returns to 7,800.
OBAMA BULL MARKET!!! WE’RE RICH Hooray! Hooray! All hail Obama!
#11 that particular debt ceiling will be reached by the end of this month.
Tex – That’s uhm, well it’s stupid.
Goldman Sachs and others have been pumping money into the markets I wouldn’t trust the Dow as an economic indicator. The fundamentals have not changed and while GDP has improved, we’re still down for 2009.
Unemployment is still up and the longer it stays up the more we’ll see news stories about foreclosures.
So, no the GDP hasn’t increased in 2009 and no unemployment hasn’t decreased and no, Obama isn’t FDR.
Respectfully… I’m not going off that cliff, no way, I have a choice, that choice is to start an Orange Revolution. You got that right how insane it is becoming, time We The People take over, these people are not dealing from a full deck. I think Rahm was right, no matter how bigoted he is, they are retarded.
I have no idea how out of touch with reality these people are, but they certainly are.
We all have to start an uprising, come together and throw everyone out, I mean every one in the Executive, Elective and Regulatory branches of government and begin anew. Dump all the UnConstitutional crazy regulations and laws in the trash, re-establish Republican Government. It is apparent in no uncertain terms we the Sovereign, we the people have to restore order and common sense to the Republic.
We have to do what our founders did.
68. I think maybe you are correct. I once did a paper on the Bolshevik coup against the Democratic government of Russia. Most people, if they know any Russian history, think that the Boshies coup was against the Monarchy. It wasn’t. The Monarchy was replaced by a democracy about 5 years before the Bolsheviks staged their coup.
Ever since then ( writing the paper, not the coup) I have had a tendency to credit malice when simple incompetence is more likely.
#70. I heard that also. I was curious if it means a new debt ceiling every month. Or will Congress pass a 3 month debt ceiling when it goes on vacation?
Which leads me to wonder if those Congress Critters will even go on vacation. They think the last series of townhall meetings was bad.
Ain’t seen nuttin’ yet. While I don’t expect town hall meeting to be replaced with public lynchings, it won’t surprise me to see the brown shirts at some of them;
http://www.youtube.com/watch?v=oLUR3ydMQXQ
That will be interesting. Mall Ninja’s vs Vietnam Vets. Who gets movie rights?
Every Senate Democrat voted for the extension of the debt limit.
Strick party line.
Here’s who is running in 2010. Some of those “safe Democrat seats” aren’t that safe, methinks.
How can the US possibly create enough
new wealth to pay its debts ?
By inventing, manufacturing, and selling things
that the rest of the world wants, badly, and
can not buy anywhere else; By being 1st, and
staying ahead of the copycats.
What is the only force on earth which can
prevent this from happening ?
The Federal Government.
Great video, Lefty #71… Thanks for the link.
In case anyone is wondering, this increase in the debt limit follows the last by about 6 weeks. The last was snuck through on Christmas Eve (talk about a lump of coal in the citizens’ stocking the next morning).
“The Senate voted Thursday to raise the ceiling on the government debt to $12.4 trillion, a massive increase over the current limit and a political problem that President Obama has promised to address next year.”
BY RAISING IT EVEN MORE!
Rats abandoning a sinking ship isn’t a novelty but when it’s the Good Ship Obamapop, it’s newsworthy:
NIMBYMP! Not in my back yard, Mr. President!
Democrat incumbents and wannabes from Missouri to Florida to Nebraska are treating Obama as if he were afflicted with the plague and a Death Panel has already passed sentence.
No fools they, the Dem pols would rather go it alone than have a presidential albatross around their necks. It makes sense, too, considering his endorsement track record success of zero percent: Virginia, New Jersey, Massachusetts.
Actually he’s zero for four if we count his and Michelle’s desperate failed trip to Copenhagen to bring home the 2016 Summer Olympics to Chicago. That first-round elimination was a humiliating face slap, repeated in December via a humiliating rebuke at the global climate talks, also in Copenhagen.
Not ready to get slapped silly by voters come November, “A Democratic Senate candidate in Missouri denounced the budget’s sky-high deficit. A Florida Democrat whose district includes the Kennedy Space Center hit the roof over NASA budget cuts. And an endangered Senate Democrat denounced proposed cuts in farm subsidies.”
The only problem with that analysis is that just about every Dem running this year is “endangered.” Just ask Virginia State Sen. Creigh Deeds, former New Jersey Governor John Corzine, and Massachusett’s A.G. Martha Coakley what happened last year.
Also, with a rampant anti-incumbency fever infecting the electorate, every Dem officeholder, federal, state, or local, is more vulnerable since the leader of their pack is the guy most responsible for the fever.
As a Baltimore Sun article put it,. . .
(Read more at http://www.genelalor.com/blog1/?p=1474)
November 2010, baby! It’s just around the corner. “This time, vote like your whole world depended on it,” like Nixon said in ’68.
Dear Roger,
You’ve got to stop obsessing about the Great Depression. History has issued a final verdict: whatever happened back then means precisely dick. FDR might have been totally ruining the US during 1930-s or he might have been doing the best anyone could do against impossible challenges of the times. But it all doesn’t matter now.
It doesn’t matter because World War 2 changed the world completely and allowed the US to emerge as a new world hegemon, military and financial. Whatever waste and debt the US had in 1939 became irrelelevant in 1945. So whatever “mistakes” were made in 1930-s don’t matter at all.
In 1930-s the whole world was in crisis, nobody had good answers and it all ended in a huge bloodbath. What really mattered was not who was the most fiscally responsible before the WW2 but who emerged in the best shape after the war.
It is quite possible that today we stand on the brink of another world crisis. And if things go seriously wrong, it doesn’t matter what deficits, in trillions and endless zeroes we are running today. It’s all abstract numbers. The real question is who is better prepared to survive the coming ordeal and dominate the world afterwards.
Lefty, by the time FDR’s reign of destruction was through, the United
States was still in a deep depression, and the interventionist precedents he established, which served only to keep the country depressed, haunts America to this very day. In fact, never again, until Barack, has an American president so brazenly and so consistently demonstrated this lack of regard for individual human beings; and never since Barack has a president stomped so savagely upon the unalienable right to life and property.
Franklin Roosevelt died on April 12, 1945.
It was not until 1947, when wartime controls and government
spending finally ended and free markets were at last allowed to operate somewhat freely — i.e. without the stranglehold of the federal government — that this country at last began to emerge from its eighteen-year depression.
That depression was much exacerbated by the interventionist
Herbert Hoover, but Franklin Delano Roosevelt took interventionism
to a whole new level.
Quoting FDR’s own economic adviser, Rexford Tugwell:
“The ideas embodied in the New Deal Legislation were a
compilation of those which had come to maturity under Herbert
Hoover’s aegis. We all of us owed much to Hoover” (Rexford Tugwell,
1946).
One of FDR’s first acts as President was to close down all banks, a maneuver he hoped would prevent scared depositors from withdrawing their savings.
What this maneuver actually did, however, was intensify the public’s panic. It didn’t improve banking at all, nor did it help in any way
with the Great Depression.
Unemployment rates over the course of the Great Depression
looked like this:
1929: 3.2 percent
1930: 8.7 percent
1931: 15.9 percent
1932: 23.6 percent
1933: 24.9 percent
1934: 21.7 percent
1935: 20.1 percent
1936: 16.9 percent
1937: 14.3 percent
1938: 19.0 percent
1939: 17.2 percent
1940: 14.6 percent
FDR averaged 17.7 percent unemployment, which is staggering:
to be more precise, FDR’s unemployment average was more than five
times the 1929 level.
Many FDR apologists like Lefty never tire of citing the 1933 to 1940 drop in unemployment as the greatest drop, percentage-wise, in the
unemployment rate ever by an American President. Of course, what this fails to take into account, among a litany of other things, is the fact that centralized banking, as opposed to privatized, through the artificial manipulation of interest rates, caused the problems to begin with, and the subsequent interventions, first by Herbert Hoover and then by FDR, exploded those problems astronomically, as testified by the unprecedented unemployment rates that decade saw: in other words, 14 percent unemployment, is, by any legitimate standard, ghastly, and only a lunatic or a fool would call it “a success.”
Quoting economists Richard Vedder and Lowell Gallaway, who
used statistical models to evaluate the results of FDR’s New Deal:
“The Great Depression was very significantly prolonged in both its duration and its magnitude by the impacts of New Deal programs.”
As Ludwig von Mises correctly noted, in the absence of government intervention, unemployment is always voluntary. Yet over ten million Americans were unemployed in 1938. Compare that to the eight million in 1931.
Fact: not until FDR conscripted millions of men and sent them
off to war did unemployment levels truly come down to manageable levels. Which, however, was hardly the end of the Great Depression; for unemployment, as everyone knows, is only one of several components. Thus:
In terms of aggregate production, statistics show no recovery until after World War II ended, when the size of government was at long last reduced.
The gross national product (GNP) didn’t recover to 1929 levels
until 1940.
Personal consumption was 8 percent lower in 1940 than in 1929.
Net private investment, the backbone of a healthy economy, from 1930 to 1940 was negative $3.1 billion, a breathtaking figure. Because of FDR’s mind-spinning interventionist policies, European nations came out of the Great Depression years ahead of America.
FDR believed that the Great Depression was caused by low wages. That was his fatal flaw. Because, in fact, the truth was the diametric opposite, as we now know: low wages (and prices) were caused by the depression.
And yet based upon this stupendous misunderstanding of basic economics, FDR proceeded to mandate wage and price controls, which
thus kept the American people in a state of poverty for well over a
decade.
When prices and wages are forced by government, the demand for labor is necessarily reduced. Why? Because in order to stay in business, businesses must turn a profit; so that when wages and prices are forced, businesses must adjust their employment and spending accordingly, or they run out of money. They must therefore cut back on
workforce, and they must decrease output. In this way, forced wages create unemployment. You see, not even FDR can subvert economic law.
This is the most basic cause and effect process you can imagine: employers simply cannot pay out money that they don’t have.
Production and production alone generates wealth. That’s another crux, and FDR’s interventionist policies crippled production.
By means of the National Industrial Relations Act (NIRA), FDR’s First New Deal sought to turn United States agriculture, and other industries, into a massive government cartel.
It was at this time also that FDR began restricting production, so that unemployment began increasing.
The NIRA failed spectacularly, but in the process, it gave birth
to another disaster: the National Recovery Administration (NRA).
The NRA was bureaucratic up to the gills, and, among other things, it required every businessperson to sign a pledge to observe FDR’s job-destroying minimum-wage laws, his maximum-hour laws, and his prohibitions on “child labor” (i.e. teenage labor), and so on. Prices were therefore not permitted to rise above or fall below “costs of production,” regardless of consumer demand.
Quoting historian John T. Flynn:
[Code-enforcement police] roamed through the garment district like storm troopers. They could enter a man’s factory, send him out, line up his employees, subject them to minute interrogation, take over his books at the instant. Night work was forbidden. Flying squadrons of these private coat-and-suit police went through the district at night, battering down doors with axes looking for men who were committing the crime of sewing together a pair of pants at night (John T. Flynn, The Roosevelt Myth, 2007).
Countless people across America were arrested and sentenced to jail or prison for invented crimes like “pressing suits of clothes for
thirty-five cents when the Tailors’ Code fixed the price at forty cents” (Ibid).
FDR also made the private ownership of gold illegal.
He nationalized gold stocks.
He created an abortion called the Agriculture Adjustment Administration (AAA), which implemented a government cartel on
agriculture markets, and which quite literally paid millions and millions of dollars to farmers for slaughtering their livestock and burning their fields, while the rest of the country starved.
Under the AAA, one sugar refining business was paid $1 million
to not refine sugar.
He made null and void all existing contracts that promised to pay in gold, which was an act of pure and simple theft, and which in any case did not inflate prices, as was his whole intention in making gold illegal in the first place.
In 1935, the United States Supreme Court ruled that Roosevelt’s NRA and AAA were unconstitutional. It’s worth noting also, if only for posterity sake, that the NRA and the AAA were both explicitly modeled after Mussolini’s fascist system, of which FDR was an explicit admirer.
FDR also emulated Mussolini’s propaganda campaign against freedom and free-markets. Under the Second New Deal, Roosevelt’s AAA, which the Supreme Court had declared unconstitutional, was, however, resurrected under the “soil conservation program.”
It too paid taxpayer money to farmers for not producing.
A number of other programs that the Supreme Court ruled unconstitutional were simply reenacted by FDR under different names
as well. Many of these unconstitutional programs, also modeled after
European fascism, are still in place today.
The Second New Deal, announced on January 4, 1935, introduced a number of new programs, in addition to the renamed old, each one equally unconstitutional, though never, alas, brought before the court.
There was, for instance, the National Labor Relations Act.
There was the Fair Labor Standards Act, which amounted to more job-destroying minimum-wage laws.
There was the Works Progress Administration.
Of course too there was the egregious and now bankrupted Social Security Act, which, among other things, forgot to take into account increasing life expectancies, and so was doomed to fail from the start, a fact which, unfortunately, most Americans don’t realize even
today.
Also, the Norris-LaGuardia Act, which Herbert Hoover made into law in 1932, was much more stringently enforced under FDR’s authoritarian hand, thereby making it impossible to prosecute against labor union violence, of which the whole history of labor unions is largely composed.
Extortion by unions was under FDR legally permitted, as long as that extortion concerned “the payment of wages by a bona fide employer to a bona fide employee” (Congressional Record 78th Congress,
first Session, House, 1934).
There were in addition, of course, the interminable taxes imposed upon businesspeople, which taxes siphoned money out of the private sector and increased unemployment, as taxes against entrepreneurs always and inevitably will, since they take away the capital that is normally used to reinvest and thus produce.
Indeed, tax increases (much of which were used to pay FDR’s
bureaucrats) were as responsible as anything else for annihilating the
American economy.
Quoting FDR’s adviser Harry Hopkins:
“I’ve got four million at work [in federally created jobs], but for God’s sake, don’t ask me what they are doing.”
This same Harry Hopkins again: “We shall tax and tax, spend and spend, and elect and elect.”
Even prior to World War II, government spending under FDR doubled and then some.
Government spending went from $4.6 billion in 1932 to $9.1 billion in 1940.
Over $23 billion in deficits were accumulated.
Current profligacy makes these numbers look comical, and indeed in terms of sheer profligacy, Barack cannot be matched; but one must not fail to take into account the times.
Deficits annually during FDR’s reign averaged 42 percent of the
federal budget, a truly incredible figure, especially considering that in 1932 FDR had the nerve to campaign against budget deficits, and he even vociferously denounced them.
The primary purpose of FDR’s preposterous New Deal spending – at least, according to many – was simply to ensure his reelection, because he, like his protégé, was another power-mad politician. Accordingly, he gave free money to hoards and hoards of poor people in exchange for the vote.
What follows is from the Official Report of the U.S. Senate Committee on Campaign Expenditures, 1938:
In one Works Progress Administration (WPA) district in Kentucky, 349 WPA employees were put to work preparing forms listing the electoral preferences of every employee on work relief. Many of those who stated that they did not intend to vote for Roosevelt were laid off.
In another Kentucky WPA district, government workers were required, as a condition of employment, to pledge to vote for the senior senator from Kentucky, who was an FDR supporter. If they refused, they were thrown off the relief rolls.
Republicans in Kentucky were told that they would have to change party affiliations if they wanted to keep their WPA jobs.
Letters were sent out to WPA employees in Kentucky instructing them to donate 2 percent of their salaries to the Roosevelt campaign if they wanted to keep their jobs.
In Pennsylvania, businessmen who leased trucks to the WPA
were solicited for $100 campaign contributions.
As in Kentucky, Pennsylvania WPA workers were told to change their party affiliation if they wanted to keep their jobs. Many people refused and were fired.
Government employment was increased dramatically right
before the elections. In Pennsylvania, “employment cards” were
distributed that entitled holders of the cards to “two to four
weeks of employment around election time.”
A Pennsylvania man who had been given a $60.50-per-month white-collar job was transferred to a pick-axe job in a limestone quarry after refusing to change his voter registration from Republican to Democrat.
Tennessee WPA workers were also instructed to contribute 2 percent of their salaries to the Democratic Party as a condition of employment.
In one congressional district in Cook County, Illinois, the WPA instructed 450 of its employees to canvass for (Democratic) votes around election time in 1938. The men were all laid off the day after the election.
In the words of historian Stanley High:
“In states like Florida and Kentucky – where the New Deal’s big fight was in the primary elections – the rise of WPA employment has hurried along in order to synchronize with the primaries” (Stanley High, “The WPA: Politicians’ Playground,” Current History, 1939).
In 1969, when all this evidence about New Deal spending came into the light, FDR apologists (i.e. academics) immediately began making excuses and rationalizing FDR’s disgustingly biased spending – for instance, the fact that residents of western states received 60 percent more federal money than residents of southern states. All the excuses these academics have made are factually inaccurate and have been refuted, many times over, by people like Jim F. Couch and William F. Shugart, in their excellent book Political Economy of the New Deal.
Franklin Roosevelt was, to quote one David Gordon, “a vain, intellectually shallow person whose principal interest was to retain at all costs his personal power” – i.e. “total subordination of his country’s welfare to his personal ambition” (David Gordon, “Power Mad,” 1999).
FDR had no grasp of economics, and in fact was really just another garden-variety politician, much like Barack Obama.
Hello Roger. Can you check your spam catchter for me? I just lost a rather lengthy comment which took me some little time to write.
Delete this.
The govt. needs cleansed, from the top down. . . what will it take to get it going?!November is a looong way away.
♪mmm mmm mmm ♪♪
Thank you, Ray, for that extensive comment on FDR’s disastrous “New Deal”.
I have not read Flynn’s book, but I’ve read Burton Folsom’s book, “New Deal or Raw Deal”, and it contains much of the same information.
What is truly infuriating is the way the main stream media, as well as the intellectuals in our universities, have for decades evaded the facts about the New Deal and promulgated, instead, the myth that massive government intervention by Roosevelt saved the economy when in fact it destroyed it.
In comment 81, Candide urges us not to examine the Great Depression, claiming that it is not relevant to today. This is a smokescreen. The laws of economics do not change — and it remains true today that we cannot borrow our way out of debt or spend our way to prosperity or tax ourselves to greater wealth. None of these nonsensical notions worked during the nightmare of Roosevelt’s terms in office — and they will not work now.
Obama is determined to drive over the cliff — which would be fine with me were it not for the fact that he intends to take the
American economy with him. We remain in great peril.
#86 Michael Smith: The most telling comment Candide makes about deficits is that “It’s all abstract numbers.” While it is, indeed, difficult to visualize a figure like — oh, say ONE TRILLION dollars — I can assure her and her fellow lefties the Chinese can count and expect it back in cold cash.
Candide -
“It doesn’t matter because World War 2 changed the world completely and allowed the US to emerge as a new world hegemon, military and financial. Whatever waste and debt the US had in 1939 became irrelelevant in 1945. So whatever “mistakes” were made in 1930-s don’t matter at all.”
Interesting. What you appear to be saying is ‘ignore history’. You also appear to be saying that it didn’t matter what the state of our economy was in 1939 because WWII was on the horizon – and WWII was actually good for us because of the way we came out of it.
Are you anticipating a REPEAT? Is THAT why you say the current fiscal irresponsibility is meaningless? Are you HOPING for some world-wide conflaguration which will essentially ‘wipe the slate clean’? I mean, WWII only resulted in between 60 and 80 million dead, but at least the US came out ok so I guess it wasn’t all bad, right? And it managed to save the legacy for FDR – sounds like a win/win situation all the way around, right Candide?
Maybe that’s the Democrat end-game: purification through fire. I suppose that’s one way to make the debt meaningless…..
It will be interesting to see what happens when America defaults on it’s debt to China.
“It will be interesting to see what happens when America defaults on it’s debt to China.”
I think we’ll then be forcibly reminded of that old Chinese Proverb – “May you live in interesting times”…..
Barring military action by China, we won’t default. Our leaders would rather endure hyperinflation than default, so we’ll print money to pay the debt and balance the budget rather than admitting the debt is unpayable. As far as WWIII is concerned, we will see a full scale WWIII no matter what we do- the geopolitical situation is that unstable. The Muslims will try to destroy Israel, and lose, while the Chinese need to eliminate their surplus of men, either by having them killed off in war, or by finding some way for them to find wives. That, my friends, is called a powder keg.
It’s as if the governing class thinks that their children will inherit their positions of power, and pass on their privileges to their relatives.
Here, for anyone who’s interested, is an example of an American President who followed the proper steps to ending a recession and preventing a great depression.
No prob-,, I’ve got it all under control!
OsamaHusseinIslamObama 2012′
(the terrorist-Uighur-ACORN-media choice)
-It’s never too early to campaign-
#24:
There is at least one.
The backstory here is that Keynesian economics facilitates the delusion that the economy includes government spending. Their formula for the totality of the economy is C (consumer) + I (investment) + G (government).
This means that the more government spends, the more prosperous we all are. But this demands we turn our back on the meaning and consequences of free exchange (private sector) and coerced exchange (government tax and spend).
Government never spends money efficiently. It cannot because it does not seek to make economic gains nearly as much as it craves political gains. As we have seen with the bailout and “stimulus”, government is happy to take money from the median families of the country (whose median income in 2008 was $50,233) and use it to create jobs that cost $250,000 or even $1 million each.
Worse, we didn’t really have the money so we borrowed it from somewhere. Now we are left with a $1 million skateboard park that adds $15,000 per year to the local economy yet the interest on the money costs us $30,000 per year.
Keynesian economics also leads us to believe that we can print any amount of money we desire, thus confusing money with wealth. Thus we are told we can create “liquidity” in the financial system without having any affect on the price of anything, except on money itself.
When government puts money on sale and demands that banks make home loans to people who cannot afford to make the payments, of course this causes home values to rise. And of course when the easy money was cut off home price fell, throwing both borrowers and lenders into financial distress can causing the loss of a mountain of money and wealth.
If anyone is interested in a more truthful view on economics I would suggest looking over the writings and works of Ludwig von Mises at mises.org.
“The New Deal made the Depression worse?
This neo-con fairy tale has been quite thoroughly tarred, feathered and ran out of town.”
The NYT debunks it, not many others do.
http://www.theaustralian.com.au/news/how-fdrs-new-deal-made-the-depression-worse/story-e6frg71f-1111117742609
For what it’s worth, neoconservative’s were liberals.
“We enact this nonsensical budget and we might as well give them the whole thing – the Statue of Liberty, McDonald’s and Apple Computer. No backsies. ”
Well Obama did give back the statue of Winston Churchill ( a gift to the citizens of the United States, not to Obama) so it’s just a matter of time before he gives back the Statue of Liberty.
Vikes lost because God punished Minn. for voting for Franken. “Saints” will lose because N.O. voted for Nagin.
So….who didn’t have the courage to vote? And why didn’t you report on it because that seems to be a pretty telling issue.
Why do you keep giving these people the benefit of the doubt? Too corrupt to see? They see. They’re doing this purposely. They are corrupt period. They will do this and more unless they are stopped. May God help us.