Home > General, News, Political, Politics, Pre Pulse Ramblings > Welcome to the Great Depression: Act II

Welcome to the Great Depression: Act II

While I have asserted time and again that FDR and his Marxeyesian economic policies prolonged and worsened what was only a Recession into a Depression, rarely are their numerate facts to support my claims.

Economists Harold Cole and Lee Ohanian now provide those facts with hard data illustrating quite succinctly how failed an experiment Keynesian economic policies are in the below piece.  So too can one find more data in Jim Powell’s terrific book:  “FDR’s Follies:  How Roosevelt and His New Deal Prolonged the Great Depression.”

Caused by government interference in the first place, the recession was exacerbated by more government intervention, beginning with Smoot-Hawley and further made sick by increased government spending in the form of the New Deal’s “make work” programs.  Wealth was shifted from the private sector to the public sector, while the costs of consumer goods skyrocketed.

The parallels today are sickening with the same scenario:  A Republican president is replaced by a Democrat President who promptly begins trade protectionism and massive, MASSIVE increases to government spending in the guise of “make work programs”–an unprecedented shift of wealth from the private sector to the public.  In addition, those institutions that caused our current crisis:  tight energy supplies, government interference in housing, and government interference in financials, remain intact.  Finally, we’ll add for good prosperity, increased legislation and compliance requirements on the same private sector we’re already raping.

Next up, increased taxes, and closed shop laws.

Welcome to the Great Depression, Act II brought to you by the Democrat Party of the United States.


US Air Force MSgt (Ret)

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  1. February 7, 2009 at 11:08 am

    I think you’ll recall that for the past 8 years we had a GOP Administration and for 6 of the past 8 years a GOP Congress. The roots of this problem are stunningly the GOP, regardless of the current effort to blame the recession on Obama. Check out this post for more information, including a graph that shows clearly that the steps FDR took in the New Deal on the whole succeeded.

    • February 7, 2009 at 12:46 pm

      Yea…and they spent nothing like this bill…not even close. Once this passes, Russia and China will dump their dollars for a better currency. Hope you enjoy paying ten dollars for a gallon of milk.

      The roots of the problem started with the Clinton administration forcing banks to give loans to people who could not pay them. The democratic controlled committe ignored and faught off attempts to regulate the housing loan issue. This collapse lead to the current crisis. Its all Democrats my friend. These are facts.

      FDR’s efforts extended the depression. You can read whatever you want but academics and serious scholars agree, FDR made the depression worse. This economic theory has NEVER worked. Show me where it has? You can’t. Japan tried in the 80’s and nothing worked until they learned the lesson.

      Think of this post when we are still in the dumpster in two years.

      The only way to fix this is to cut taxes, cut spending and force the federal gov. to use its money for TRUE stimulus. This package has 93 percent spending. IT will crush us. This country will be at risk. 2/3rds of future US dollars will be forced out of circulation just to service this debt.

  2. February 7, 2009 at 1:23 pm

    The total cost of the Iraq War alone is estimated to hit $2 trillion—and when you have a war along with tax cuts, you incur a lot of debt. Bush and the GOP Congress wasted trillions of dollars on an unnecessary war—think of that.

    So far as the housing crisis, an authority no less than Alan Greenspan said that it had absolutely nothing to do with the Fannie Mae and Freddie Mac loans to minorities. It was the subprime market, done totally by private enterprise, not the government, that started the collapse. But the enormous debt incurred by Bush and the GOP Congress contributed mightily. You might want to remember that at the end of the Clinton Administration, the US enjoyed a heft SURPLUS. That was thrown away by Bush and the GOP.

    So far as FDR and the Great Depression, take a careful look at this graph and read what Paul Krugman (Nobel prize, Economics) says in this post. Contrary to what you write, economists and historians agree that the New Deal was a success and would have been even more successful if FDR had not been convinced to curtail some government programs in 1937.

  3. February 7, 2009 at 6:46 pm

    WRONG. The Iraq war is dwarfed by this bill. Even the liberal media acknowledges that. Look at the link below.


    Greenspan is dodging. He is wrong. He missed this totally. He is part of the reason why we are in the mess we are in. He even acknowledges he blew it.


    By the way, the guy who predicted this (Schiff) claims the impending doom this spending bill will cause.

    The debt you speak of by Bush. All the more reason NOT to go into more debt. You use the logic of debt to justify why this happened and scream to go into more debt?

    There is no discussing this issue with you. You cherry pick arguments. FDR’s plan FAILED. UCLA disagrees with you. I’m going with UCLA




    Watch this and learn.


    Keep this in mind. THIS HAS NEVER WORKED. You are taking capitol out of the public sector. IT WILL FAIL.

    These links explain why Fannie and Freddie cause the current crisis. In fact, it’s acknowledged by MOST legitimate individuals that this started our current crisis. Read below.


    To sit there and say Fannie and Freddie had nothing to do with our current situation is ignorant. Bottom line the republicans tried to fix it. The democrats fought them off. The bottom fell out, leading to our current mess.

    Bush was not great. He spent to much. You seem to acknowledge that. Given your support of this bill you should be a huge Bush fan. SPENDING IS NOT THE ANSWER.

  4. February 7, 2009 at 6:50 pm

    Just curious: do you have any background in macroeconomics? What did you make of the graph I pointed you to? What about the economists who say that Keynes approach is right?

    If we spend correctly (on infrastructure projects, for example), we’ll end up with something to show for the money. The money ($2 trillion according to Stiglitz’s figures) spent in Iraq was a total waste and humanitarian disaster, besides providing a great recruiting tool for the terrorist jihad.

  5. February 7, 2009 at 7:10 pm

    Some more for you leisureguy. Barons also disagrees with you. I’ll go with Barons.


    CONTRARY TO A VIEW POPULARIZED DURING THE 2008 presidential election season, the current economic crisis was not the result of deregulation.
    The Bush administration made many mistakes, but deregulation was not one of them.
    Not only was there no major deregulation passed during the past eight years, but the Bush administration and a Republican Congress approved the most sweeping financial-market regulation in decades.
    The bipartisan Sarbanes-Oxley Act was enacted in 2002 to prevent corporate fraud and restore investor confidence after the collapse of Enron and WorldCom. It failed to prevent the accounting fraud and influence-peddling scandals at Fannie Mae and Freddie Mac. And even after those scandals were widely understood, regulators sent Fannie and Freddie back into the market to continue buying subprime loans, lending and borrowing with implied taxpayer backing.
    Across the government, the Bush administration supported new regulations that added almost 1,000 pages a year to the Federal Register, nearly a record. If this is insufficient regulation, it’s hard to imagine a scope that would be effective.

    So what did cause the economic crash of 2008?

    Today’s problems have their roots in programs and financial instruments that shifted the locus of moral responsibility away from private individuals and institutions to wider circles that were understood to end with a government guarantee. Heads of the top banks and financial institutions could approve substandard home-mortgage underwriting — prone to increased default — because those loans could be securitized by Wall Street and sold off to investors or to government-sponsored enterprises (GSEs), with no likely recourse to the financial institution of origin.

    Our present crisis began in the 1970s, during the Carter administration, with passage of the Community Reinvestment Act to stem bank redlining and liberalize lending in order to extend home ownership in lower-income communities. Then in the 1990s, the Department of Housing and Urban Development took a fateful step by getting the GSEs to accept subprime mortgages. With Fannie and Freddie easing credit requirements on loans they would purchase from lenders, banks could greatly increase lending to borrowers unqualified for conventional loans. In the name of extending affordable housing, this broadened the acceptability of risky loans throughout the financial system.

  6. February 7, 2009 at 7:16 pm

    Your graph is sourced from a left/liberal perspective. It proves nothing. What about the UCLA study?

    I look at your graph and can just as easily say that it is evidence of how the new deal stiffled the recovery.

    When the new deal stopped the depression stopped.

  7. February 7, 2009 at 7:25 pm

    Ohh and as far as Iraq goes. Not a failure. Did not like it, would not have done it but it is in fact done. Can not be undone. It is in fact a success at this point.

    You are ignorant to the mind of the terrorist. Trust me on this. They were killing us before Iraq, they would have wanted to kill us if Iraq never happened. These people hate us not because of Iraq but because of who we are. The crap about Iraq being a recruiting tool for terrorist is tired propaganda.

    You talk about careful spending. Do you believe that it is careful spending when senators slam together a bill in a few hours and try to shove it down our throats? This is not careful spending. It is pork. Pure and simple. 7 percent of this bill is legitimate stimulus spending. The rest is crap. How the hell is acorn a stimulus.

    You don’t really argue against my points because I am guessing you can’t. What about Japan? Have not heard from you on that. What about Schiff? Nothing there. What about the UCLA study? Silence. What about Barons? Still nothing. Greenspan? still nothing.

    I am not afraid to alter my view points when shown GOOD, REPUTABLE AND FULLY VETTED sources.

    Put the ideology aside. Listen to what these people are trying to do to us. Listen to Schiff. This will be the worst thing to happen to this country since the civil war. It might kill us.

  8. Filvis
    February 7, 2009 at 9:48 pm


    Pure leftist drivel.

    Keynesian economic theories have NEVER worked, ever. We cannot either tax ourselves into prosperity nor spend ourselves into prosperity. FDR’s failed economic theories were all about Keynes and the facts speak for themselves: what would have been a recession turned into a Great Depression. Europe recovered significantly quicker than our nation.

    Spending on the Iraq War, which was in our national interest and certainly not an unnecessary war, pales in comparison to the unconstitutional, redistribution of wealth spending our nation incurs every year especially on pork, health care, and retirement costs. Find them in the Constitution, cite Article and paragraph if you would. I won’t hold my breath.

    Iraq is now a stable DEMOCRACY, a close friend in our global fight, a bulwark now against Iran, and is located in the heart of the Middle East. In this instance then, it was worth every flippin’ cent. Only a leftist appeaser believes that obtaining an ally and creating the first Arab democracy in the history of mankind is not worth it.

    Yes, yes the GOP did indeed run Congress and owned spending. But “Mr Economist” which you are not, your accounting skills are daft. What you fail to take into account is Debt-to-GDP ratio. Liberals never take this into account because they don’t know how the free market works, or how the “language of business works” and that is accounting. Any accountant, or any 1st level accounting student knows the basic formula: Assets = liabilities + owner’s equity. Hence, Assets = debt +/- GDP. Since under Bush GDP grew from $7 to almost $15 (thanks to the tax cuts) Assets then equals (public debt $5T/total debt $10T – $14T GDP) approximately either $9T or $5T. We are in the black sir, and that’s just math.

    The idea then is to grow GDP faster than we incur debt. That was a reality under a Republican congress. Under the Democrat congress (and it is congress that owns spending, not the President), we’re now seeing a contraction to GDP but a massive increase to spending. Our Debt-to-GDP ratio then is dwindling and we owe it to only one entity: The Democrat Party of the United States.

    This stimulus does not grow GDP at all, but it spends, spends, spends against borrowed money. It redistributes wealth from the private sector and hands it over to the public sector. Since GDP is based on the productivity of the private sector, clearly leftists don’t even understand what a recession is or how to correct it.

    On the matter with our current crisis. Yes, Fannie Mae and Freddie Mac had a significant role to play in this. 3 sectors all contributed to the mess, and they were all a result of leftist, Democrat Party programs that interfered with the private sector: Energy, Housing, and Financial. You are being disengenuous Leisureguy when you assert Fannie/Freddie had nothing to do with housing, true, it was the Financial sector where they became a problem.

    It begins with the leftist Community Reinvesemt Act, a Carter-era act strengthened by Clinton. Banks and financial houses were essentially ordered to approve sub-prime loans to those who could not afford them or could not pay them back, and were given adjustable rate mortgages (ARMs). If they did not approve them, they were fined by Clinton, or sued by entities in the private sector (BHO sued Citicorp as a “community organizer”–better to say Marxist). But Freddie/Fannie also assured banks/loans that they would take over their bad paper. So, government interference in the financial market adversely influenced mortgage lenders to approve loans they had no business approving. In time, to clear balance sheets, the mortgage companies would send them over to FNM/FDM who in turn would bundle them and sell them all over the world..infecting EVERYONE with this.

    As a result of this intervention, we had a housing bubble–an aberration in housing demand FOR DECADES. We now have a housing inventory that might just take decades to correct (and we haven’t even hit commercial property, but that’s coming).

    All was fine with this, so long as mortgage holders paid their mortgages. But then the last element, energy prices, came into play. Because the Democrat Party is married to the EnviroMarxists, we have not been allowed to develop our own energy for well over 30 years. As a result, we are dependent upon foreign oil, and the world has to endure restrictive energy supplies. For “Mr Economist” prices is affected by the relationship between demand and supply. With the Democrats restricting supply, and demand increasing exponentially (thanks to the success of China and India), price had to rise. And it did, to record levels.

    Those who could already barely afford their mortgages now had a choice to make: pay for their mortgage, or heat their homes and drive their cars. They chose the latter and mortgages, especially sub-prime, began to fail in record numbers. These failures affected the entire financial industry, all over the world and voila: Recession.

    Global recession brought to you by one entity and one entity only: The Democrat Party of the United States.

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