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SOCIALISM: Check your history

| November 22, 2020 1:00 AM

The Great Depression was not caused by capitalism and "socialism" did not save us from it. In fact, a closer look into the cause of the Depression unveils the fact that the Federal Reserve along with centralized government planning caused it.

First, the Federal Reserve in the '20s increased the money supply with inflationary policies by 61 percent.

Second, Hoover was not a hands off President like was suggested. Hoover doubled federal spending in just four years. He signed the Smoot-Hawley act which raised taxes on over 20,000 imported goods, along with raising taxes for top income earners from 25 percent to 63 percent.

Hoover also launched huge public works projects drastically increasing federal spending. Most of FDRs New Deal legislation was actually programs started during the Hoover administration. Despite FDR campaigning against more federal spending, FDR increased spending even more, which prolonged the Depression, among other things.

In Amity Shlaes' book "The Forgotten Man" it is highlighted how FDR prolonged the Depression, almost on purpose, to be re-elected. In 1931 unemployment was 16.3 percent and in 1938 it was 17.2. Clearly more government spending did not work.

Lastly, WW2 did not not end the Depression either. The Depression ended when the federal government cut spending. Shortly after the war, the federal government cut spending by roughly 75 percent, and by 1948 the unemployment rate was under 4 percent.

Centralized planning, not capitalism, causes recessions.

MASON BROWN

Coeur d'Alene