Geoff Michael

Key Players:

Rexford Tugwell – “Head Brain Truster” and a principal architect of the New Deal

Harold Ickes – Secretary of the Interior

Henry Wallace – Secretary of Agriculture and later Vice President

Donald Richberg – Director of the National Recovery Administration

Observing are Joseph Stalin and Leon Trotsky (drawing up the plan)

Carey Orr – Cartoonist

Today versus the Great Depression

How many times have you heard that the United States is currently suffering through the “worst economic crisis since the Great Depression?”  A hundred times or more?  That’s a complete joke.  We are in far worse shape now than we were then.  The only thing preventing the total collapse of the economy right now is that the government is borrowing and printing trillions of dollars at warp speed.

This is only postponing the day of reckoning.  You can't keep printing funny money forever and get away with it.  When the economy does collapse, it will be far worse than anything we have ever seen before.  In fact, the 1930s will look like the good old days.

Let's do a real comparison:

• Today we have the largest federal debt in history: $15 trillion (and climbing exponentially) with unfunded liabilities of over $100 trillion (in 1929 it was essentially zero, and the government was not leveraged).
• Today we owe foreign countries an aggregate of almost $5 trillion, a 50% increase in only two years.  Do you think it's a good thing for our country to be beholden to these countries?  What happens if they all decide to sell their holdings at once?
  
• Today we have a $700 billion annual negative balance of payments (in 1929 it was positive).
• Today we have the largest personal debt levels in history (in 1929 it was minimal, most people were afraid to carry debt, and credit cards did not exist).
• In the 1930s, Americans had a strong work ethic and were very reluctant and embarrassed to ask for help from anyone.  They would do any job to support themselves and their families.  Contrast that attitude with today's welfare mentality, where many people are happy to live at the taxpayers' expense for as long as they can get away with it.
  
• Today we have the lowest savings rate in history (although it has risen somewhat since the crisis began).
• In 1929 the dollar was backed by gold bullion.  Today it is backed by your faith in the federal government to preserve and protect the currency's value.  How much faith do you have in our government to do that?

• Today we have the largest, most expensive entitlement programs in our history that are all going bankrupt: Medicare, Medicaid, Social Security (in 1929 these didn't exist).
• Today we have the largest federal bureaucracy in history and more people are living off the government than at any time previously.  The "nanny state" didn't exist in 1929, and most people were ashamed to get help from the government.  Now we have many people who expect the government to take care of them from womb to tomb.
• Today our infrastructure is crumbling all around us and there is no money to repair or replace it.  Highways, bridges, power grids, and water systems won't last forever.
  
• Today we have illegal aliens streaming across our borders siphoning money and free services from the taxpayers (a problem that didn't exist in 1929).
• Today we have a consumer-driven service economy (in 1929 it was manufacturing and agricultural-based; we created real wealth, not fictional wealth).  How many factories have been constructed in the last twenty years that weren't built by a foreign company?
  
• Today the price of oil is heading higher and we consume one-quarter of all the oil being produced in the world (in 1929 this was not even an issue).
• General Motors, Bear Stearns, Lehman Brothers and a host of other companies survived the Great Depression, but couldn't make it this time around.
• In the 1930s, we didn't have to worry about terrorists killing thousands of Americans and destroying our infrastructure.  What do you think will happen to our economy if we suffer a more devastating attack than September 11, 2001?
  

What makes the clowns in Washington think we are now in a “recession?”  They want you to believe that so you don't panic, but it doesn’t take rocket science to figure out where this is headed.  While printing money may give the appearance of a “recovery,” it will not be sustainable without printing even more money.  It is analogous to giving larger and larger doses of heroin to an addict, only our economy is addicted to debt.  If you keep doing that, rather than breaking the addiction for good, the addict will die.  The cartoon below says it all.

Many people don't realize that we experienced a depression in 1920-21 that was completely overshadowed by the Great Depression of the 1930s.  What did the government do then that quickly turned the economy around and set the stage for the Roaring Twenties?  It did the exact opposite of what has been done ever since then..........and it worked.  Here's the story.