The Greatest Depression

Great Depression happened in 1929. It took over 10 years to cure.

Effects of depression:
13 million people became unemployed.
Industrial production fell by nearly 45% between the years 1929 and 1932.
Home-building dropped by 80% between the years 1929 and 1932.
From the years 1929 to 1932, about 5000 banks went out of business.

Spending more than is really there can never take a nation out of a failing economy. Spending from savings can, while spending that which you do not have does not. Some governments can while most others should not. China has a massive surplus of cash and investments where the US Government doesn’t even have zero as they are in the red in excess of 8 trillion dollars which is the net affect of subtracting the improperly recorded assets for Social Security and other government appropriations like gas taxes (improper reporting anyway as these withholdings have been totally spent) from the amounts borrowed. China is winning while the USA is losing. Why? Well, the American taxpayers of today must ask those in power: “Why is it that so many current Americans think President Obama can follow the paths of FDR and somehow get the USA out of what appears to be a never ending period of zero or negative economic growth, per capita that is, when they have no extra money to spend?” What is worse is the fact that accurate reporting can confirm that the FDR government sponsored programs never worked to get the USA out of the Great Depression anyway, even though they were real value adders to our culture unlike those “don’t work and get paid anyway” government programs of today. What did work for him economically was WWII and for some reason most do not understand this. When it comes to the accurate reporting of American history the most important fact which requires proper learning is that the productivity of the nation was severely damaged by the dumb moves made by the Federal Reserve following the market crash of 1929 when they reacted improperly thereby creating the Great Depression. The monetary experts at that time thought that by reducing the money supply via controlling the amount of gold or its government representative, the American dollars circulating in the economic system, they could minimize further failures of the stock market. What they did not understand was that the stock market is not the US economy and even worse by pulling back the money in circulation they created a failing system which could only be repaired by inflating the currency level back to where it should have been based upon and that was the overall productivity of the nation. Sadly, that repair was finally justified only due to the need for more money to fund the US focused war efforts starting in the late 1930’s (when the FDR group wanted to get involved in wars without the approval of Congress) with such things as funding the air force training bases build in Canada and the attempted no-charge sales of US military equipment sent to England before December 7, 1941. You know the rest. The American economy has had a few somewhat minor fixes since that time but today we are right back to the same level of economic failure as we were back before the Second World War.

Now, what am I getting at here? Well, it seems that the American Governments of the last half century all think that the US economy will never falter, ever again and with a belief in growth forever the rights to increase the currency in circulation levels along with the national debt levels should never be questioned. Unfortunately, an inflated currency approach primarily funded via the Federal Reserve’s legal ability to increase the dollars in circulation has been the improper approach from the beginning but it has really taken off since LBJ decided to fund his war efforts without increasing taxes right though to today’s federal government deficit financing approaches. Every one of those following LBJ particularly Obama who is well on the path to setting a record increase in the federal deficit as he even wants to do better than both the Bushes and Reagan, combined. Like FDR they all wanted wars in order to back the fiscal and monetary increase justifications of their governments. Well, this nation should no longer think this is 1929 or 1939 and therefore we should not even think about taking the same approaches as those taken by FDR either before or after the start of his wars.

The massive failure of the American economy is just around the corner. To start we are already at war and have been for close to a decade and cannot even afford the ones we have let alone think this is 1939 and we need more of them. Next, we are approaching the maximum sustainable population as we are within a decade of becoming food importers. Finally, we can no longer borrow from anyone, even prosperous nations like China, because without massive tax increases we will never be able to pay back our current borrowings as there will have to be massive tax increases to simply cover the past borrowings. The government of China knows that we will not be able to handle buying back our present notes (bonds) when they come due. The exuberance like that of the past generations of Americans will never occur again once the truth gets out. We as a nation have failed just like every other military focused nation in the history of this world has failed and will have to penalize the next four or five generations of Americans who will have to pick up the tab for the reckless spending of our and our parents generations. The lowering of the national productivity per capita averages in order to employ more will even result where fewer win. Sadly, it is without any doubt that the longer we as a nation refuse to understand how much we can spend and seemingly never have to pay for it the greater the turmoil our next generations will face. The Greatest Depression of all time for the USA awaits them!

- David Gage

Related Posts:

• It’s difficult to have optimism when the U.S. is piling on insurmountable debt.
• Federal Reserve playing Games
• The US Government doesn’t have $4.3 trillion to cover their bet.
• How many down months before we admit we are in a depression?
• What Should the President and His Economic Team do now?

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