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Have Republican economic policies once again made a Great Depression inevitable?

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Two proffered answers to the topic question, the first one from the political right, the second from the left:

Reagan insider David Stockman says GOP destroyed the US economy'

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Yes, this is exactly what David Stockman, President Ronald Reagan's director of the Office of Management and Budget, wrote in a recent New York Times op-ed piece, "Four Deformations of the Apocalypse."

The word is not "destroying" according to Stockman the GOP has already "destroyed" the U.S. economy, setting up an "American Apocalypse" that is imminent. In other words, it could be many years before the nation's unemployment rate reaches pre-recession levels.

Why focus on Stockman's message? If we are to understand what happened, and are to have any chance of reversing it, it's imperative that we ask the following question:

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How did the great nation of America lose its moral compass and drift so far off course, to where our national survival is threatened?

We've arrived at a historic turning point as a nation that no longer needs outside enemies to destroy us, for we are committing suicide. Democracy. Capitalism. The American dream. All are dying, Stockman says. Why? Because of the economic decisions of the GOP over the past 40 years, according to this leading Reagan Republican.

"If there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. The nation's public debt will soon reach $18 trillion." This screams out for austerity and sacrifice. But instead, the GOP insists "that the nation's wealthiest taxpayers be spared even a three-percentage-point tax rate increase."

What does this mean? It means that in the past 40 years Republican ideology has gone from solid principles to hype and slogans. Stockman continues: "Republicans used to believe that prosperity depended upon the regular balancing of accounts -- in government, in international trade, on the ledgers of central banks and in the financial affairs of private households and businesses too." But no more. Today there's a "new catechism" that's "little more than money printing and deficit finance -- vulgar Keynesianism robed in the ideological vestments of the prosperous classes" making a mockery of GOP ideals. This has resulted in "serial financial bubbles and Wall Street depredations that have crippled our economy." GOP ideals have been perversely transformed into their opposites.

Stockman's indictment warns that these "new policy doctrines have caused four great deformations of the national economy, and modern Republicans have turned a blind eye to each one:"

Deformation #1. Nixon irresponsibly dumped the gold standard, thereby precipitating America's 40-year spending binge

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Richard Nixon "defaulted on American obligations under the 1944 Bretton Woods agreement to balance our accounts with the world." So for the past 40 years, America has been living "beyond our means as a nation" on "borrowed prosperity on an epic scale leading to an outcome that Milton Friedman said could never happen when, in 1971, he persuaded President Nixon to unleash on the world trillions of paper dollars no longer redeemable in gold or other fixed monetary reserves."

Here's what Friedman said: "Just let the free market set currency exchange rates, and trade deficits will self-correct." But Friedman was wrong by trillions. And unfortunately, "once relieved of the discipline of defending a fixed value for their currencies, politicians the world over were free to cheapen their money and disregard their neighbors."

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Several years after receiving my M.A. in social science (interdisciplinary studies) I was an instructor at S.F. State University for a year, but then went back to designing automated machinery, and then tech writing, in Silicon Valley. I've (more...)

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