Obama claims we can’t “cut our way to prosperity.” Once again, Obama demonstrates that he is either lying or ignorant (possibly both). The truth is, we can cut our way to prosperity. What’s more, we have historical evidence to prove it. We could easily argue that Reagan’s tax cuts led to the boom of the late 80’s and 90’s, but I’m more interested in a much clearer example. What do you know about the “great depression” of 1920-21?
The Depression of 1920–21 was an extremely sharp deflationary recession in the United States, shortly after the end of World War I. It lasted from January 1920 to July 1921. The extent of the deflation was not only large, but large relative to the accompanying decline in real product.
Following the end of the Depression of 1920–21, the Roaring Twenties brought a period of economic prosperity.
It’s likely you don’t know about it, but what you need to know about more than the 1920-21 depression is why you don’t know about it. You don’t know about it because the Progressive revisionists don’t want you to know how we got out of it. We got out of it by cutting federal taxes and spending. Under President Calvin Coolidge, we cut our way to the prosperity we now know as “The Roaring Twenties.”
Calvin Coolidge assumed the presidency of the United States on August 2, 1923 following the death of Warren G. Harding. Coolidge, together with Treasury Secretary Andrew W. Mellon, endeavored to fulfill Harding’s 1920 campaign promises to return the nation to “normalcy” following World War I.[i] Together they engineered an era of unparalleled growth and prosperity for America.[ii] By harnessing America’s financial resources, Coolidge and Mellon were successful in making private funding available for such emerging industries as automobile production, electricity generation, radio broadcasting, consumer products, aviation, and real estate construction.[iii] Gross National Product from 1923 to 1928 grew roughly three percent annually.[iv] The Coolidge administration’s success helped to shrink the national war debt by 34 percent, enhance government efficiency, and cut the tax burden on American citizens. [v] These activities were a moral imperative.[vi] By March 3, 1929, when Coolidge stepped down as president, tax rates had been slashed to less than one-third those of wartime levels[vii] and, “[B]y 1927, 98 percent of the population paid no income tax.” [viii] People had jobs and the unemployment rate was 3.3 percent. For the first time ordinary people could afford luxuries such as automobiles, radios, refrigerators and vacuum cleaners.[ix]
But, if you know anything about Coolidge at all, you were probably taught that he was the cause of the Great Depression. But, looking backward through the full record of history, you will find that – while Coolidge is blamed – just like the crashes in the first decade of this century, the Great Depression finds its real roots more in the policies of Progressive thinking than in Coolidge’s economics.
If you’ll read through that link, you’ll learn that the Great Depression has more to do with the Federal Reserve and U.S. monetary policy than Coolidge’s economic policy. You’ll also run into Coolidge’s successor, Progressive, Herbert Hoover. In short, just as the Left’s policy agenda undermined the gains Reagan helped us make and led directly to the Housing Crash of 2007 (and arguably the stock market crash of 2001), the Progressive policy agenda under Hoover led to the Great Depression – which, incidentally, was only “Great” in the U.S. In the rest of the world, it only lasted some 18 months. The Great Depression was global, but it lasted for years in the U.S. because FDR refused to abandon the Progressive agenda. FDR’s policies kept the U.S. in a prolonged and unnecessary depression. Whereas the rest of the world reverted to traditional and proven economic policies, thereby extricating themselves from the global crash – the crash we didn’t recover from until WW II.
But today, the Progressives are doing everything they can to undermine this reality. They don’t want you to know the truth because, if you do, the failure of their ideas becomes even more apparent than it already is. And, if we recognize their policies have failed everywhere they have ever been tried, we might finally abandon them and return to time-tested and proven economic policy, which would then undermine the Progressives hold on power. And the one thing Progressives will never do is relinquish their hold on power. After all, their founding hero, Woodrow Wilson, wrote that the sole purpose for their political existence is to seize and exercise power over the masses – to save them from themselves. You see, our enslavement is always in our best interest…so long as Progressives are our masters, that is.