The Harding Plan: Cut spending and Get Out of the Way.

[Jackson]

Thomas Sowell

An Economic 'Plan'?


1. Former president Bill Clinton told the Democratic National Convention that Barack Obama has a plan to rescue the economy, and only the fact that the Republicans stood in his way has stopped him from getting the economy out of the doldrums.

2. From all this, and much else that is said in the media and on the campaign trail, you might think that the economy requires government intervention to revive and create jobs. It is Beltway dogma that the government has to "do something."

3 History tells a different story. For the first 150 years of this country's existence, the federal government felt no great need to "do something" when the economy turned down.

Over that long span of time, the economic downturns were neither as deep nor as long lasting as they have been since the federal government decided that it had to "do something" in the wake of the stock market crash of 1929, which set a new precedent.

4. One of the last of the "do nothing" presidents was Warren G. Harding. In 1921, under President Harding, unemployment hit 11.7 percent -- higher than it has been under President Obama. Harding did nothing to get the economy stimulated. [/B

5. ]Far from spending more money to try to "jump start" the economy, President Harding actually reduced government spending, as the tax revenues declined during the economic downturn.

6. The 11.7 percent unemployment rate in 1921 fell to 6.7 percent in 1922, and then to 2.4 percent in 1923. It is hard to think of any government intervention in the economy that produced such a sharp and swift reduction in unemployment as was produced by just staying out of the way and letting the economy rebound on its own.

7. Something similar happened under Ronald Reagan. Unemployment peaked at 9.7 percent early in the Reagan administration. Like Harding and earlier presidents, Reagan did nothing, despite outraged outcries in the media.

8 The economy once again revived on its own. Three years later, unemployment was down to 7.2 percent -- and it kept on falling, as the country experienced twenty years of economic growth with low inflation and low unemployment.

An Economic 'Plan'? - Thomas Sowell - Page 1

The Harding Plan: Cut spending and Get Out of the Way.

 

[CrusaderFrank]

This is why I laugh when people tell me how "great" FDR was

 

[regent]

This is why I laugh when people tell me how "great" FDR was

Both historians, and the people that lived through the Great Depression, indicate that FDR was great. The people voted for FDR four times in a row, and the historians have never rated FDR less than one of the three greatest presidents, and recently, as America's greatest.

 

[auditor0007]

Thomas Sowell

An Economic 'Plan'?


1. Former president Bill Clinton told the Democratic National Convention that Barack Obama has a plan to rescue the economy, and only the fact that the Republicans stood in his way has stopped him from getting the economy out of the doldrums.

2. From all this, and much else that is said in the media and on the campaign trail, you might think that the economy requires government intervention to revive and create jobs. It is Beltway dogma that the government has to "do something."

3 History tells a different story. For the first 150 years of this country's existence, the federal government felt no great need to "do something" when the economy turned down.

Over that long span of time, the economic downturns were neither as deep nor as long lasting as they have been since the federal government decided that it had to "do something" in the wake of the stock market crash of 1929, which set a new precedent.

4. One of the last of the "do nothing" presidents was Warren G. Harding. In 1921, under President Harding, unemployment hit 11.7 percent -- higher than it has been under President Obama. Harding did nothing to get the economy stimulated. [/B

5. ]Far from spending more money to try to "jump start" the economy, President Harding actually reduced government spending, as the tax revenues declined during the economic downturn.

6. The 11.7 percent unemployment rate in 1921 fell to 6.7 percent in 1922, and then to 2.4 percent in 1923. It is hard to think of any government intervention in the economy that produced such a sharp and swift reduction in unemployment as was produced by just staying out of the way and letting the economy rebound on its own.

7. Something similar happened under Ronald Reagan. Unemployment peaked at 9.7 percent early in the Reagan administration. Like Harding and earlier presidents, Reagan did nothing, despite outraged outcries in the media.

8 The economy once again revived on its own. Three years later, unemployment was down to 7.2 percent -- and it kept on falling, as the country experienced twenty years of economic growth with low inflation and low unemployment.

An Economic 'Plan'? - Thomas Sowell - Page 1

The Harding Plan: Cut spending and Get Out of the Way.

Just a few problems with all of this. First of all, Harding doing nothing and letting capitalism run wild with basically no controls at all led us right into the stock market crash and the Great Depression. This was not a good thing.

As for Reagan not doing anything, are you serious? First he cut taxes, which wasn't such a bad thing, because they were a bit high at the time. But then he saw that he cut them too much, so he actually raised them again, but not to the same levels as before cutting them. Keep this in mind; during Reagan's first term, unemployment remained pretty high, but government revenues exceeded 19% of GDP, 4% more than we have had since this economic downturn began. Because of Reagan having plenty of government revenues, he was able to expand government, which also helped create jobs and reduce unemployment. Under Obama, because revenues have been so low, we have lost nearly 700,000 government jobs at all levels.

Last of all, much of the recession Reagan faced was due to keeping inflation under control. Paul Volker had interest rates so high during Reagan's first term, that economic growth had come to a halt. By Reagan's second term, inflation was well on it's way to being under control and interest rates began to fall, although they were still high compared to today's rates. Of course, as interest rates fell, business was more easily able to borrow money, and the economy began to take off, and of course then unemployment fell as companies began to expand.

These are all very different situations than what we face today.

 

[CrusaderFrank]

This is why I laugh when people tell me how "great" FDR was

Both historians, and the people that lived through the Great Depression, indicate that FDR was great. The people voted for FDR four times in a row, and the historians have never rated FDR less than one of the three greatest presidents, and recently, as America's greatest.

FDR was a great failure, he oversaw an economy worse than the 7 Biblical leans years. His Soviet style central planning and hatred of business stifled economic activity in the USA.

 

[CrusaderFrank]

Thomas Sowell

An Economic 'Plan'?


1. Former president Bill Clinton told the Democratic National Convention that Barack Obama has a plan to rescue the economy, and only the fact that the Republicans stood in his way has stopped him from getting the economy out of the doldrums.

2. From all this, and much else that is said in the media and on the campaign trail, you might think that the economy requires government intervention to revive and create jobs. It is Beltway dogma that the government has to "do something."

3 History tells a different story. For the first 150 years of this country's existence, the federal government felt no great need to "do something" when the economy turned down.

Over that long span of time, the economic downturns were neither as deep nor as long lasting as they have been since the federal government decided that it had to "do something" in the wake of the stock market crash of 1929, which set a new precedent.

4. One of the last of the "do nothing" presidents was Warren G. Harding. In 1921, under President Harding, unemployment hit 11.7 percent -- higher than it has been under President Obama. Harding did nothing to get the economy stimulated. [/B

5. ]Far from spending more money to try to "jump start" the economy, President Harding actually reduced government spending, as the tax revenues declined during the economic downturn.

6. The 11.7 percent unemployment rate in 1921 fell to 6.7 percent in 1922, and then to 2.4 percent in 1923. It is hard to think of any government intervention in the economy that produced such a sharp and swift reduction in unemployment as was produced by just staying out of the way and letting the economy rebound on its own.

7. Something similar happened under Ronald Reagan. Unemployment peaked at 9.7 percent early in the Reagan administration. Like Harding and earlier presidents, Reagan did nothing, despite outraged outcries in the media.

8 The economy once again revived on its own. Three years later, unemployment was down to 7.2 percent -- and it kept on falling, as the country experienced twenty years of economic growth with low inflation and low unemployment.

An Economic 'Plan'? - Thomas Sowell - Page 1

The Harding Plan: Cut spending and Get Out of the Way.

Just a few problems with all of this. First of all, Harding doing nothing and letting capitalism run wild with basically no controls at all led us right into the stock market crash and the Great Depression. This was not a good thing.

As for Reagan not doing anything, are you serious? First he cut taxes, which wasn't such a bad thing, because they were a bit high at the time. But then he saw that he cut them too much, so he actually raised them again, but not to the same levels as before cutting them. Keep this in mind; during Reagan's first term, unemployment remained pretty high, but government revenues exceeded 19% of GDP, 4% more than we have had since this economic downturn began. Because of Reagan having plenty of government revenues, he was able to expand government, which also helped create jobs and reduce unemployment. Under Obama, because revenues have been so low, we have lost nearly 700,000 government jobs at all levels.

Last of all, much of the recession Reagan faced was due to keeping inflation under control. Paul Volker had interest rates so high during Reagan's first term, that economic growth had come to a halt. By Reagan's second term, inflation was well on it's way to being under control and interest rates began to fall, although they were still high compared to today's rates. Of course, as interest rates fell, business was more easily able to borrow money, and the economy began to take off, and of course then unemployment fell as companies began to expand.

These are all very different situations than what we face today.

The Fed caused the crash and started the FDR Depression.

 

[Avorysuds]

This is why I laugh when people tell me how "great" FDR was

Both historians, and the people that lived through the Great Depression, indicate that FDR was great. The people voted for FDR four times in a row, and the historians have never rated FDR less than one of the three greatest presidents, and recently, as America's greatest.

Yes, people think welfare is great... People that lived under FDR might have had nothing and been starving but my gawd FDR was spending like a King!!!

FDR was one of if not the worst President in US history, he vastly prolonged the depression much as Obama has prolonged this recession. “Historians” are nothing but people with opinions, nothing more… Facts speak louder than partisanship, and the fact is FDR ran this country into the ground, destroying tens of millions of people’s lives. Everyone votes for welfare Presidents, that’s why both parties have shifted so far to the left when it comes to polc8ies yet both jump far right when talking about spending. Oddly only massive spending occurs, never the cuts in spending.


Thankfully they cut spending and lowered taxes after that fucking Dictator FDR died.

 

[auditor0007]

Thomas Sowell

An Economic 'Plan'?


1. Former president Bill Clinton told the Democratic National Convention that Barack Obama has a plan to rescue the economy, and only the fact that the Republicans stood in his way has stopped him from getting the economy out of the doldrums.

2. From all this, and much else that is said in the media and on the campaign trail, you might think that the economy requires government intervention to revive and create jobs. It is Beltway dogma that the government has to "do something."

3 History tells a different story. For the first 150 years of this country's existence, the federal government felt no great need to "do something" when the economy turned down.

Over that long span of time, the economic downturns were neither as deep nor as long lasting as they have been since the federal government decided that it had to "do something" in the wake of the stock market crash of 1929, which set a new precedent.

4. One of the last of the "do nothing" presidents was Warren G. Harding. In 1921, under President Harding, unemployment hit 11.7 percent -- higher than it has been under President Obama. Harding did nothing to get the economy stimulated. [/B

5. ]Far from spending more money to try to "jump start" the economy, President Harding actually reduced government spending, as the tax revenues declined during the economic downturn.

6. The 11.7 percent unemployment rate in 1921 fell to 6.7 percent in 1922, and then to 2.4 percent in 1923. It is hard to think of any government intervention in the economy that produced such a sharp and swift reduction in unemployment as was produced by just staying out of the way and letting the economy rebound on its own.

7. Something similar happened under Ronald Reagan. Unemployment peaked at 9.7 percent early in the Reagan administration. Like Harding and earlier presidents, Reagan did nothing, despite outraged outcries in the media.

8 The economy once again revived on its own. Three years later, unemployment was down to 7.2 percent -- and it kept on falling, as the country experienced twenty years of economic growth with low inflation and low unemployment.

An Economic 'Plan'? - Thomas Sowell - Page 1

The Harding Plan: Cut spending and Get Out of the Way.

Just a few problems with all of this. First of all, Harding doing nothing and letting capitalism run wild with basically no controls at all led us right into the stock market crash and the Great Depression. This was not a good thing.

As for Reagan not doing anything, are you serious? First he cut taxes, which wasn't such a bad thing, because they were a bit high at the time. But then he saw that he cut them too much, so he actually raised them again, but not to the same levels as before cutting them. Keep this in mind; during Reagan's first term, unemployment remained pretty high, but government revenues exceeded 19% of GDP, 4% more than we have had since this economic downturn began. Because of Reagan having plenty of government revenues, he was able to expand government, which also helped create jobs and reduce unemployment. Under Obama, because revenues have been so low, we have lost nearly 700,000 government jobs at all levels.

Last of all, much of the recession Reagan faced was due to keeping inflation under control. Paul Volker had interest rates so high during Reagan's first term, that economic growth had come to a halt. By Reagan's second term, inflation was well on it's way to being under control and interest rates began to fall, although they were still high compared to today's rates. Of course, as interest rates fell, business was more easily able to borrow money, and the economy began to take off, and of course then unemployment fell as companies began to expand.

These are all very different situations than what we face today.

The Fed caused the crash and started the FDR Depression. Please try to get one fact in per post

The lack of regulation governing how stocks could be purchased was the major factor in the crash. Most stocks were being bought on margin, up to 90% margin, meaning investors, including the banks, only put up 10% to purchase stock. When the market crashed, not only was the value of the stock lost, all the margin buyers still owed the 90% they had borrowed. None of that money was there to begin with, so it could never be paid back. This led to the liquidation of one bank after another, and since regular American's deposits weren't covered by any type of insurance like the FDIC, even people who had money all of a sudden had none, because it went with the banks.

 

[rightwinger]

Harding was one of our most corrupt and inept presidents in history

 

[JakeStarkey]

Harding may have been murdered by his wife for inept and dangerous economic policies.

 

[rightwinger]

Harding may have been murdered by his wife for inept and dangerous economic policies.

Plus he was running hookers through the white house

 

[regent]

The Harding Administrtation was probably the most corrupt in out history, Sinclair ended up with the naval oil reserves at Teapot Dome, as the Harding administration even sold VA materials. Even for Republicans the corruption was overdone. Harding is still is rated as America's worst president with Bush only taking fifth place in the worst-president race.

 

[Wiseacre]

Harding may have been murdered by his wife for inept and dangerous economic policies.

Plus he was running hookers through the white house

Both claims are ridiculous with absolutely no basis in fact. No evidence has ever been substantiated to prove either story.

 

[Wiseacre]

Just a few problems with all of this. First of all, Harding doing nothing and letting capitalism run wild with basically no controls at all led us right into the stock market crash and the Great Depression. This was not a good thing.

As for Reagan not doing anything, are you serious? First he cut taxes, which wasn't such a bad thing, because they were a bit high at the time. But then he saw that he cut them too much, so he actually raised them again, but not to the same levels as before cutting them. Keep this in mind; during Reagan's first term, unemployment remained pretty high, but government revenues exceeded 19% of GDP, 4% more than we have had since this economic downturn began. Because of Reagan having plenty of government revenues, he was able to expand government, which also helped create jobs and reduce unemployment. Under Obama, because revenues have been so low, we have lost nearly 700,000 government jobs at all levels.

Last of all, much of the recession Reagan faced was due to keeping inflation under control. Paul Volker had interest rates so high during Reagan's first term, that economic growth had come to a halt. By Reagan's second term, inflation was well on it's way to being under control and interest rates began to fall, although they were still high compared to today's rates. Of course, as interest rates fell, business was more easily able to borrow money, and the economy began to take off, and of course then unemployment fell as companies began to expand.

These are all very different situations than what we face today.

The Fed caused the crash and started the FDR Depression. Please try to get one fact in per post

The lack of regulation governing how stocks could be purchased was the major factor in the crash. Most stocks were being bought on margin, up to 90% margin, meaning investors, including the banks, only put up 10% to purchase stock. When the market crashed, not only was the value of the stock lost, all the margin buyers still owed the 90% they had borrowed. None of that money was there to begin with, so it could never be paid back. This led to the liquidation of one bank after another, and since regular American's deposits weren't covered by any type of insurance like the FDIC, even people who had money all of a sudden had none, because it went with the banks.

This is true, buying on margin was likely the greatest cause behind the 1929 crash that lead to the Great Depression. Don't know if Harding saw it coming cuz he wasn't that smart, but Herbert Hoover was. While Secy of Treasury under Coolidge he tried to convince Congress to pass some restraints on margin buying, but to no avail.

 

[Wiseacre]

Thomas Sowell

An Economic 'Plan'?


1. Former president Bill Clinton told the Democratic National Convention that Barack Obama has a plan to rescue the economy, and only the fact that the Republicans stood in his way has stopped him from getting the economy out of the doldrums.

2. From all this, and much else that is said in the media and on the campaign trail, you might think that the economy requires government intervention to revive and create jobs. It is Beltway dogma that the government has to "do something."

3 History tells a different story. For the first 150 years of this country's existence, the federal government felt no great need to "do something" when the economy turned down.

Over that long span of time, the economic downturns were neither as deep nor as long lasting as they have been since the federal government decided that it had to "do something" in the wake of the stock market crash of 1929, which set a new precedent.

4. One of the last of the "do nothing" presidents was Warren G. Harding. In 1921, under President Harding, unemployment hit 11.7 percent -- higher than it has been under President Obama. Harding did nothing to get the economy stimulated. [/B

5. ]Far from spending more money to try to "jump start" the economy, President Harding actually reduced government spending, as the tax revenues declined during the economic downturn.

6. The 11.7 percent unemployment rate in 1921 fell to 6.7 percent in 1922, and then to 2.4 percent in 1923. It is hard to think of any government intervention in the economy that produced such a sharp and swift reduction in unemployment as was produced by just staying out of the way and letting the economy rebound on its own.

7. Something similar happened under Ronald Reagan. Unemployment peaked at 9.7 percent early in the Reagan administration. Like Harding and earlier presidents, Reagan did nothing, despite outraged outcries in the media.

8 The economy once again revived on its own. Three years later, unemployment was down to 7.2 percent -- and it kept on falling, as the country experienced twenty years of economic growth with low inflation and low unemployment.

An Economic 'Plan'? - Thomas Sowell - Page 1

The Harding Plan: Cut spending and Get Out of the Way.

BTW, Harding did cut taxes significantly under the Revenue Act of 1921. His administration was considerably pro business in many ways, lower taxes, less spending, and reduced regulations seemed to work then; one wonders why we aren't trying the same formula this time, or at least not going in the opposite direction.

 

[Avatar4321]

This is why I laugh when people tell me how "great" FDR was

Both historians, and the people that lived through the Great Depression, indicate that FDR was great. The people voted for FDR four times in a row, and the historians have never rated FDR less than one of the three greatest presidents, and recently, as America's greatest.

And when he died, the people immediately passed an amendment to the Constitution to prevent anyone from being elected President 4 times. Why did they do that if he was so great?

 

[Avatar4321]

Harding was one of our most corrupt and inept presidents in history

You're confusing Harding with Obama.

 

[Avatar4321]

This is true, buying on margin was likely the greatest cause behind the 1929 crash that lead to the Great Depression. Don't know if Harding saw it coming cuz he wasn't that smart, but Herbert Hoover was. While Secy of Treasury under Coolidge he tried to convince Congress to pass some restraints on margin buying, but to no avail.

The cause of the Depression was the people becoming corrupt. See that's what is supposed to happen in a free market economy. The results are dependent on how the people react. If the people are good, honest, and upright, the economy grows. If they become corrupt, idle, dishonest, etc. the economy collapses.

Economic collapse isn't the problem it's the reaction to the problem: The people becoming corrupt. It isn't a sign that the market doesnt work, it's a sign that the market does work.

When we become arrogant and think we can avoid the consequences for our actions in the economy, and empower government to start regulating our lives, it leads to more problems, not less.

The fix to our economy problems is to free ourselves and to step up to eliminate dishonesty, idleness, and corruption from our lives. If we will humble ourselves, the economy will grow. If we are ruled by our pride, we will be our own worst enemies.

 

[auditor0007]

Thomas Sowell

An Economic 'Plan'?


1. Former president Bill Clinton told the Democratic National Convention that Barack Obama has a plan to rescue the economy, and only the fact that the Republicans stood in his way has stopped him from getting the economy out of the doldrums.

2. From all this, and much else that is said in the media and on the campaign trail, you might think that the economy requires government intervention to revive and create jobs. It is Beltway dogma that the government has to "do something."

3 History tells a different story. For the first 150 years of this country's existence, the federal government felt no great need to "do something" when the economy turned down.

Over that long span of time, the economic downturns were neither as deep nor as long lasting as they have been since the federal government decided that it had to "do something" in the wake of the stock market crash of 1929, which set a new precedent.

4. One of the last of the "do nothing" presidents was Warren G. Harding. In 1921, under President Harding, unemployment hit 11.7 percent -- higher than it has been under President Obama. Harding did nothing to get the economy stimulated. [/B

5. ]Far from spending more money to try to "jump start" the economy, President Harding actually reduced government spending, as the tax revenues declined during the economic downturn.

6. The 11.7 percent unemployment rate in 1921 fell to 6.7 percent in 1922, and then to 2.4 percent in 1923. It is hard to think of any government intervention in the economy that produced such a sharp and swift reduction in unemployment as was produced by just staying out of the way and letting the economy rebound on its own.

7. Something similar happened under Ronald Reagan. Unemployment peaked at 9.7 percent early in the Reagan administration. Like Harding and earlier presidents, Reagan did nothing, despite outraged outcries in the media.

8 The economy once again revived on its own. Three years later, unemployment was down to 7.2 percent -- and it kept on falling, as the country experienced twenty years of economic growth with low inflation and low unemployment.

An Economic 'Plan'? - Thomas Sowell - Page 1

The Harding Plan: Cut spending and Get Out of the Way.

BTW, Harding did cut taxes significantly under the Revenue Act of 1921. His administration was considerably pro business in many ways, lower taxes, less spending, and reduced regulations seemed to work then; one wonders why we aren't trying the same formula this time, or at least not going in the opposite direction.

Seriously? How much more do you want to cut taxes? They are at their lowest level in over 60 years. During Reagan's first term, federal revenue was over 19% of GDP, even with a horrible economy. Under Obama, federal revenue has lagged at about 15% of GDP. Cutting taxes more will only cut revenue more and create even bigger deficits. If you want to know where the problem lies, look at all the money private business is keeping out of play, over $2 trillion and some now say it is pushing $3 trillion. Why are we not finding a way to get this money into the economy? Cutting taxes is not going to get this money into the economy.

Sitting Atop Trillions: What Would Business Do with Another Tax Break?

Conservatives routinely declare that businesses can’t hire anyone because tax burdens are too high (or "uncertain"—the bête noir of the day) and the way to create jobs is to give business more money. Among other things, corporations have launched a new campaign in Washington for a tax repatriation holiday that would allow businesses to bring home as much as $1 trillion in offshore profits at a very low-tax rate, cash they say could be used to create jobs and boost the economy.

But business already has plenty of cash, and if you look at what corporate America is actually doing with this money, it’s not pretty.

In 2010, businesses in the U.S. were sitting on $2 trillion in cash (a record high percentage of assets) and when we look at the global picture we see that the top 1,000 non-financial companies in the world are still sitting on more than $3.4 trillion in cash. In case you were wondering what happens with that cash, cash does not create jobs—investments do and investments don't happen without consumer demand. Thus, giving business more money leads to bigger numbers in checking accounts, not jobs.

https://www.commondreams.org/view/2011/07/18-9

 

[JakeStarkey]

And neither has "Hoover's economic miracle".

Harding may have been murdered by his wife for inept and dangerous economic policies.

Plus he was running hookers through the white house

Both claims are ridiculous with absolutely no basis in fact. No evidence has ever been substantiated to prove either story.