Wednesday, November 28, 2012

Do Presidents not learn from history?

Actually, President Obama has learned the lessons from the 1930s Great Depression well.  The Great Depression was extended by FDR who raised taxes each time there appeared to be a fragile recovery.  FDR also campaigned against the high government spending of Hoover (like Obama and Bush), and to this day Hoover is blamed.

By the spring of 1937, production, profits, and wages had regained their 1929 levels. Unemployment remained high, but it was slightly lower than the 25% rate seen in 1933. The American economy took a sharp downturn in mid-1937, lasting for 13 months through most of 1938. Industrial production declined almost 30 percent and production of durable goods fell even faster. Unemployment jumped from 14.3% in 1937 to 19.0% in 1938.

The top tax rate in 1938 was 78% and on capital gains it was 30%. They were 24% and 12.5% in 1929.  Who knows how quickly the country could have recovered if Hoover and FDR had none thrown the federal government into the mix?   Even some of the programs put in place by FDR were declared illegal or ran out, but he launched a “progressive” socialist plan that we have to this day.

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