A little while ago I posted about the Depression of 1921, and how no one has really heard of it because we came out of it so quickly. And we came out of it quickly because of capitalist policies of low taxes and cut government spending, not because of socialistic control and regulation, higher taxes, and increased spending. I also referenced a few articles about the depression, as well as a video.
We call what happened next the “Roaring ‘20s,” because the economy absolutely went nuts. Average Americans came to own cars, radio, have appliances and the electricity to power them (electricity use rose by almost 300% between 1899 and 1929), telephones, and a myriad of other products once considered luxuries. Ford’s Model T, once considered revolutionary for its low cost and simplicity, now was out; General Motors, with its different car line for every income class was in. And they say tax cuts don’t work? Tell that to the Americans of the Roaring ‘20s.”
Schweikart also pens an article on how the Founding Fathers dealt with the national debt after the Revolutionary War, with the hopes that it may provide some inspiration for our current fiscal problems.
But history offers some hope. The young republic of the United States of America faced an equally daunting debt bomb in 1788, and, perhaps given the new nation’s utter lack of credit history, an even greater challenge than we face today. But the Founders dug their way out to the point of fiscal solvency fairly quickly, and within a decade the nation was viewed as a sterling credit risk. How was this possible?
Both are excellent, if brief, reads.