Creating Federal Reserve Accounting Unit Dollars (FRAUDs) out of nothing, manipulating interest rates and deficit spending were instrumental to the present economic situation. How could anyone believe more of the same would get us out? They have never worked in the past and in 1929-’30 these policies turned a recession into the Great Depression.
For a change, let’s do something that has worked. The depression of 1920-’21 was every bit as bad as the 2007 downturn, but recovery was much faster. In 1920, unemployment went from 4 percent to nearly 12 percent and GDP dropped 17 percent. The solution? President Harding cut the government’s budget in half by 1922, cut tax rates for all income groups and ran a budget surplus.
Recovery started in 1921. In 1922, unemployment was down to 6.7 percent and in 1923 only 2.4 percent. The Federal Reserve Bank of New York raised the discount rate to 7 percent, a new all-time high, which helped decrease the number of FRAUDs issued.
The actions taken by Bush, Obama and Bernanke are exactly the opposite of what worked, and are copies of the failed FDR policies, so is it any wonder their actions are deepening and lengthening the current economic crises?