The official statistics show unemployment is at 10%. However the unofficial statistics show that it is at 17%. During the 1st Great Depression unemployment peaked at 25%. And what did the government do then?
They added fuel to the fire.
Instead of letting market forces do their work, FDR and Herbert Hoover began a long chain of intervention in the economy. This merely prolonged the recovery. This legislation was known as the New Deal.
Economist Thomas Sowell has pointed out that the New Deal did not end the great depression, World War II did. He explains that the War itself wasn't a catalyst for economic recovery since wars increase national deficits and destroy natural resources. Instead, World War II stopped the New Deal - the same intervention that was supposed to help the recovery!
I obviously did not explain HOW the New Deal prolonged the recovery. What I will say is that it reallocated resources to places to where it should not have gone.
Think about it today, does anyone REALLY THINK (besides the Obama Administration) that spending on COSTRUCTION JOBS will help fuel economic growth? How does this help the private sector? By allowing them to travel to work faster?
The Obama administration is making the same mistakes as its predecessors. Little do many know there was a recession in the early 1920's (I think 1920-1922) much worse than the first year of the great depression in the 1930's. But the government did the right thing. They didn't intervene and the recession was over within two years.
Maybe if our government takes its hand off of the economy maybe it will actually be free to grow!
For two recent articles on this topic click here:
Associated Press takes on Stimulus Spending
Peter Schiff on government job "creation."
Thomas Sowell on Obama's Job "Creation"
Phyllis Schlafly on Unemployment Causes
A second column from P. Schlafly on Unemployment
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