The Great Depression of the 1930s
We are spending more money than we have ever spent before, and it does not work… I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises… I say after eight years of this administration we have just as much unemployment as when we started… and an enormous debt, to boot.
May 6th, 1939, Secretary of the Treasury of the United States, Henry Morgenthau, Jr. Committee Report. Social Security: Hearings relative to the Social Security Act Amendments of 1939, Committee on Ways and Means, House of Representatives, Volumes 1-3. Washington, DC: U.S. Government Printing Office.
What was the high of the unemployment rate in the Great Depression?, Northern Trust Financial Services, Daily Global Commentary, July 7, 2009, http://www.northerntrust.com/popups/popup_noprint.html?http://web-xp2a-pws.ntrs.com/content//media/attachment/data/econ_research/0907/document/dd070709.pdf.
Total public debt in the late 1920s was about $17 billion. By 1940, before the U.S. entered World War II, the total public debt was about $50.7 billion.
United States Department of the Treasury, Bureau of the Public Debt, http://www.publicdebt.treas.gov/history/world_wars.htm.
1837… Andrew Jackson, the seventh president of the United States, was suspicious of banks and did not trust the paper money they issued. In 1837, he liquidated the Second Bank of the United States, returning the government’s original investment plus a profit. This resulted in a huge government surplus of funds. (In 1835, the $17.9 million budget surplus was greater than the total government expenses for that year.) By January of 1835, for the first and only time, all of the government’s interest-bearing debt was paid off.
United States Department of the Treasury, Bureau of the Public Debt, http://www.publicdebt.treas.gov/history/1800.htm.
Debt FAQ: http://www.gao.gov/new.items/d04485sp.pdf
Background:
- NPR: Obama gives Keynes his first Real-World test
- Ron Paul: Cures for our Economic Disease
- Cato Institute: Flaws of old-fashioned and neo-Keynesian economicy theory
- Niall Ferguson: America Needs to Cancel Its Debt
- PBS: The Ascent of Money
- Ludwig von Mises Institute: “Do You Austrians Have a Better Idea?”
- 7 Fallacies of Economics (1981)
- Murray Rothbard: The Myth of Neutral Taxation
- Robert Murphy: Nothing Paradoxical about Thrift
- Robert Higgs: Recession and Recovery
