Stimulus Spending and Trickle Up Poverty – A Do-Over for the Great Depression
July 2, 2009 - If you think that the battle over stimulus spending vs. a free market economy is new, you’re wrong. Many of the economic problems faced by the country today are very similar to those faced by us in 1930’s. The government’s response to those issues years ago involved big government and big spending. The end result was a depression that lasted longer than any other economic downturn in US history. Unfortunately, our political leaders today don’t seem to have studied US history; at least they have not studied the economics of US history. And because of that, we appear to be headed down the same path today that we did 80 years ago. Just take a look at this cartoon from the Washington Post in 1934.
As the saying goes, those who don’t study history and doomed to repeat it. But the American people don’t deserve the problems that our political elite appear to be determined to feed us. Soup lines. Unemployment rising to 25%. Before you say that can’t happen, remember that the numbers are calculated differently today than they were in the 1930’s. If you use the old methodology, we are currently at better than 16% unemployment – much higher than the official government number – and the same rate faced by the country in 1931. And that rate is still rising.
Unemployment and a contracting economy were two of the primary items that President Obama’s stimulus package was supposed to help. There is little evidence that the government’s spending has done much. Even so, Obama told an audience yesterday that the stimulus package has worked. He did that just before a new report on jobs was released which showed unemployment at 9.5%; the worst numbers using the current methodology in more than a decade.
There is no reason to believe that government overspending today won’t lead to the same result as it did during the Great Depression. If that happens, the economy will continue to contract for at least two more years, unemployment will continue to rise over the same period, and we can look forward to ten more years of a sluggish economy.
Politics & Politicians 
