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Warren Harding, newly elected President in 1920, appointed the enormously successful Pittsburgh banker Andrew Mellon Secretary of the Treasury, with the duty of fixing the economy. Mellon adopted what became the supply-side economic formula. He slashed the top income tax rate to 25%, and the bottom rate from 8% to 1%, increasing the income level to which it first applied by 50%. Moreover, Mellon led the Fed to stop the money supply drain, return interest rates to standard levels, and devote itself to stable prices. The Fed would look to market price levels, particularly commodities, including gold, for its guide.
The result was the Roaring '20s, the greatest boom in American history to that point, essentially beginning the modern American economy. Real output galloped, stock prices tripled, real wages advanced with productivity increases, and prices were stable. "It was in the twenties that Americans bought their first car, their first radio, made their first long distance telephone call, took their first vacation,"
The Timeless Principles of American Prosperity
Article Source: The American Spectator- Enjoy this article? Help vote it up the 'Vine.
- Public Discussion (8)
It sucks that the American Dream is dead. No longer will future generations have it better than their parents, unless it's among the top One, perhaps Two, percent. American jobs have been sent overseas; wages have been stagnant since Reagan; our necessities (energy, healthcare, communications, and financial services) have been holding Americans hostage and gouging them for decades; our political system is broken, belonging to those with the money to buy politicians; and we have an entire political party and movement dedicated to taking away from America, rather than building up. That party has become fascist.
The American Dream is dead. Has the American Experiment failed, too? Is it over for democracy, freedom, and representative govenrment? We teeter on the brink of totalitarianism. The next ten years will tell. I'm not hopeful.
- 2 votes
#1 - Thu Jul 29, 2010 10:00 AM EDTHas the American Experiment failed, too?
As popular as blaming big business is, the problem is the American voter. Higher corporate income and capital gain taxes,expanded entitlement program benefits,artificially low interest rates and a worldwide military complex are very popular with the electorate, even though the root cause of our economic problem and the vast majority of our federal spending can eventually be traced back to those factors.
As we speak, the Democratic party is planning a campaign of "The republicans are wanting to hurt your Social Security", even though the program is hopelessly insolvent and a far poorer retirement investment than any other retirement savings plan. The Republican and Democratic parties equate "a strong defense" with maintaining and paying for 700+ military bases around the world, even in areas with not threat of attacking the US. And voters keep buying in......
- 3 votes
#2 - Thu Jul 29, 2010 10:26 AM EDTYou don't do the Republicans justice, Daniel. They don't want to hurt Social Security, they want to eliminate it, taking all the money in Social Security and putting it into private pockets. Those, like me, who have been paying into SS and Medicare for decades will simply see our money disappear into the maw of Wall Street and private equity groups.
We are being told by the Republicans that this is for our own good, to deal with the deficit, or something. It escapes me how taking public money and putting it into private hands does anything positive to pay down the deficit. We who can think know that's a ploy or an excuse or a convenient lie.
No, Daniel, the urge is to plunder, to take from our government, economy, and nation without accountability, without responsibility, and without limit. Pay down the deficit? HAH! Not the Republicans, not ever. They like their spending just fine; they truly, truly enjoy taking public money and putting it into private hands, specific private hands, hands and pockets that provide something in return. What they really, really don't like is having to pay their bills. So we get debt. And we now have a new scheme: run up the debt, but hide it from the public, simply by not being honest or putting the debt into the budget. Nice, eh? If you're a plundering Republican.
The voters aren't buying in to that now that we know what's going on. Ask an American if it's OK with then that the rich and powerful take all their Social Security and Medicare money and keep it, and they'll tell you, No. Ask if it's OK that we're lied to, and they'll tell you, No. Ask if it's OK to be powerless over ones fate, and the answer will be, No.
All we have to fear, Daniel, are the fearmongers themselves. Been there, done that. Enough is enough.
- 1 vote
You don't do the Republicans justice, Daniel. They don't want to hurt Social Security, they want to eliminate it, taking all the money in Social Security and putting it into private pockets. Those, like me, who have been paying into SS and Medicare for decades will simply see our money disappear into the maw of Wall Street and private equity groups.
When I total the amount of Social Security funds paid in my name over my working career, it comes to about 12% of my income. I have contributed about 10% of my income to 401Ks and IRAs, which are heavily invested in "private equity groups". I have done the math, and if that 12% had been put into my 401Ks instead of SS, even with the market drop of the past few years, I would receive more than 5 times what my SS statement projects I would get, and I could retire at 60 easily, as opposed to the penance I will get from SS at the old age of 67.
It is politically correct to say that money "dissapears" on Wall Street, but they are great when compared to the mismanagement of the federal government. I personally wish Social Security had been struck down by the supreme court with other parts of FDRs New Deal. The favorably of SS is simply more political spin that the uneducated electorate buys into.
- 3 votes
#3 - Thu Jul 29, 2010 11:16 AM EDTThere is no desire to return value to the American citizen. The desire is to take all the value and put it in ones own pocket, or the pockets of others in the cabal. The part that cannot be captured is good will, or lack of good will, on the part of Wall Street and the GOP. We can go by past deeds and present words, Daniel, and learn that there is not good will, there is no desire to do what's best for our government, our nation, or our people. There is a desire to plunder, Daniel, to simply take away without accountability, responsibility, or limit. That lack of good will - worse, that presence of ill will - is the telling part of this equation, even if we can't put it on a spreadsheet.
#4 - Thu Jul 29, 2010 11:52 AM EDTThere is no desire to return value to the American citizen.
You are so right. The design of our constitution was intended to give the citizens (actually, it was originally just land owners) the right to vote for representation in this republic to prevent this lack of desire. When the voting public became anyone without a very recent felony conviction, the level of character and understanding of basic economics on the part of the electorate fell to the wayside.
With an unthinking following, a politician like Congresswoman Pelosi can easily vilify the business community, all the while backing massively corrupt and unbalanced budget bills. President Bush could invade a country that posed no invasion threat to us at the cost of trillions of dollars in debt with massive bi-partisan support by equating it to national defense with the blind electorate.
What the country needs is an educated,thoughtful, and responsible electorate, that does not treat one of the two major political parties like their favorite football team,following blindly and believing any rhetoric they spew. We need an voting electorate that is willing to understand the content of a bill beyond the misleading labels, and either support or rebuke a representative based solely on his or her voting record and the reasoning behind it.
- 1 vote
#5 - Thu Jul 29, 2010 1:42 PM EDTStock market changes over the years:
http://www.contrarianprofits.com/articles/how-has-the-market-changed-over-the-last-60-years/15515
1950's +259.48%
1960's +53.66%
1970's +16.06%
1980's +234.15%
1990's +308.48%
2000's -43.96%
If my math is correct, If I had $1,000 in a Dow fund starting in 1970, it would be worth around $9,000 today. That's with no additonal revenue added. How does that compare to the promise of SS?
- 1 vote
#6 - Thu Jul 29, 2010 1:53 PM EDTHow does that compare to the promise of SS?
Best case, you would get 86 cents on a dollar from SS, most likely case - nothing.
It is frustrating that SS is the 3rd rail of politics. I guess that most voters assume what congresswoman Pelosi implies is true; since there are no assets behind it, fixing it means the checks will simply stop.
Any plans proposed by Congressman Paul from TX and Congressman Ryan from Wisconsin for dealing with the Social Security fiasco are met with scorn from their own party and are used as spin material by Congresswoman Pelosi to say "they want to take away your Social Security", which is a brazen lie, obvious if anyone were to read the plans. She caters to the blind followers,and it works.
- 1 vote
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