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February 13, 2009 at 18:13:30 Permalink Promoted to Headline (H3) on 2/13/09: The Numbers From the Great Depression Diary Entry by Darren Wolfe (about the author) |
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:::::::: In his diary entry"'Failure' of the New Deal, Part II" Mr. Bonsell keeps throwing these numbers around, they're not what's in question. The question is what these numbers mean. As I point out in"Recovery Depends on Investment and Capital Accumulation": When the government spends untold fortunes to stimulate the economy, GDP and unemployment numbers may temporarily improve, but this improvement is illusory. All one does under this scenario is put more money out chasing a stagnant or declining supply of goods and services. The resources used in such a process are not being invested in any kind of productive facilities. On the contrary, productive facilities are being run down to support the make work projects that the government is spending tax money on. (I know that governments also spend money by running deficits, but ultimately the debts must be paid out of tax revenues. Governments can also "print" money, that is paid for with inflation) Reinforcing that point is Robert Higgs in "The Mythology of Roosevelt and the New Deal" back in 1998 he wrote: In the face of the interventionist onslaught, the American economy between 1930 and 1940 failed to add anything to its capital stock: net private investment for that eleven-year period totaled minus $3.1 billion.[2] Without capital accumulation, no economy can grow. Between 1929 and 1939 the economy sacrificed an entire decade of normal economic growth, which would have increased the national income 30 to 40 percent. Let me add that the Rossevelt administration thought their New Deal a failure. Treasury Secretary, Henry Morgenthau wrote in his diary May 1939: "We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and now if I am wrong somebody else can have my job. I want to see this country prosper. 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.[49] And enormous debt to boot." In cabinet meetings in November 1937 FDR said the following: "I get all kinds of criticisms and complaints about the economic "I'm sick and tired of being told by the cabinet, by Henry and everybody else what's the matter with the country and nobody suggests what I should do." "The Roosevelt Myth", pages 116 & 117 Obviously, FDR thought they had failed & didn't have a clue what to do about the economy.
situation, but few people come into me with any concrete suggestions
as to how the situation can be alleviated. It's easy enough to
criticize, but it's another thing to help."
Darren Wolfe, otherwise known as The International Libertarian, is the former Eastern Vice Chair of the Libertarian Party of Pennsylvania. He grew up in Puerto Rico and lived in Venezuela for seven years, including the first year of Chavez' rule. (more...)
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