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Three Blind Bankers: Reflections on the House Financial Services Committee Hearings
FDR devalued the dollar 75% in 1934 to stimulate the economy. He died in office of a stroke.
While real estate and security markets rallied from 1932 lows, the economy did not regain previous 1929 highs until the 1954 baby boom after income taxes were reduced from 94%.
Hoover is widely blamed for 1929 and FDR is credited with getting US out of the Great Depression with World War II. Economic facts show otherwise. There were serious recessions before, during and after World War II.
WWII did not create prosperity. It destroyed property and killed 60,000,000 people firebombing Dresden and carpet bombing London and Tokyo. President Truman ordered Little Boy and Fat Man uranium and plutonium bombs dropped on Hiroshima and Nagasaki with 175,000 immediate Japanese deaths to save an estimated million American lives from invasion.
The savings of Rosie the Riveter and lack of consumer products during the war, plus post-war tax cuts, laid the financial foundation for the Baby Boom of the Fifties and Sixties.
Then Truman raised income taxes to 92% to pay for the Korean War. We had another recession.
Pulitzer Prize winner and London School of Economics matriculant President John Kennedy lowered taxes again to grow the economy.
JFK also decided to eliminate the third largest budget expense, interest to the Federal Reserve and Treasury, replacing Federal Reserve interest Notes with United States Silver Certificates. His untimely assassination stopped this, and silver was removed from Constitutional currency under LBJ, who raised taxes to 77%.
From then on, inflation became an even greater problem, hitting 15% in 1980. Inflation put income tax payers into higher and higher tax brackets.
Ronald Reagan was one of the first Presidents with a degree in Economics. He shifted from taxing production to consumption, the so-called supply side. He supported Art Laffer Jack Kemp Bill Roth income tax rate reductions from 70% to 28%.
RR introduced capital gains and dividend cuts, inflation indexing of tax brackets, 10% Tax Credits and Accelerated Cost Recovery for businesses. The number of pages added to the Federal Register of government rules and regulations declined under RR the only time in the last 50 years.
Our economy peaked out under Reagan with 8% growth, unemployment down from 8% to 6% and the dollar twice its current value. No wonder Congress named their airport for his prosperity.
Despite numerous budget deadlocks, Defense Spending Supply-siders let Tip O’Neill’s Democrat Congress quadruple two hundred years of national debt in 8 years as they expanded Federal Debts 89.2%. This again was much faster than the economy or population. The savings rate continued to decline.
John Hinckley used a German pistol from Dallas to shoot six Devastator explosive hollowpoint bullets in 3 seconds to hit and disable four people, including President of the free world. RR lost half his blood with a punctured lung. The bullets were reportedly illegal and not manufactured in the USA. Like Jackson’s marvel, they did not explode. The Hinckley oil family was Bush financial supporter and friend, with a pending date with the Bushes
Herbert Walker Bush Senior and his protégé William Jefferson Clinton raised taxes to 31 and 40%. Harvard MBA W Bush reduced them to 35%. The Federal Debt increased tenfold. The Misery Index, Inflation plus Unemployment, increased in real terms, while real wages and economic growth declined, leading to one party government in 2009:
http://www.taxfoundation.org/taxdata/show/151.html
http://www.shadowstats.com/alternate_data
http://en.wikipedia.org/wiki/United_States_public_debt
In summary, three generations of Democrats and Republicans supported Federal Reserve Bank and Income Taxes that did not stabilize the economy, but handicapped it on the road to hell paved with good intentions.
American citizens suffering declining savings and standards of living may finally wake up as their financial lives and retirements collapse with no real help beyond lip service from government.
