We Must Not Repeat the Great Depression

Family Security Matters ^ | 20 September | Dick McDonald

[K-oneTexas]

 We Must Not Repeat the Great Depression

In 1929, men flew out of windows because they lost their highly leveraged bets (you only had to put up 10% to buy stock). In 2008, instead of dead bodies on the pavement we have the “financiers” retreating to the Hamptons to spend their millions. This time, instead of Republicans committing suicide, we have Democrat CEOs fleecing the public and laughing all the way to the bank – cleverly blaming Republicans for the fraud they have perpetrated.

Now enter the 1930s communist adherents to the debate in 2008. It seems like déjà vu all over again. The Democrats under Barack Obama want to raise taxes, raise interest rates, renegotiate trade agreement, eliminate outsourcing, raise tariffs and over-regulate business. Everyone on earth knows those policies are the prescriptions for an extended and massive depression just like the Great One FDR nurtured. The collectivist-inspired Democrats of the 1930s never righted the economic ship. It took a World War to do that. They extended at most a two-year economic downturn into a 12 year nightmare – 1929 to 1941 – and visionless Republicans like Herbert Hoover gave them an assist. We even had RINOs then.

 

Ordinary Americans have been fooled into believing that FDR was a great steward of America’s economic ship when in fact he was a collectivist who believed government was the solution, not the problem. His 91% tax rate on incomes over $50,000 proves how out-of-touch he and the Democrats were. Over the years that marginal tax rate has been lowered under the Republicans to 15% for investment income and capital gains. As a result during the last eight years the country has realized the greatest period of wealth creation ever experienced by any civilization on Earth.

 

Today what these latter-day socialists are peddling is a tax cut for 95% of the people. It amounts to nothing more than chump change. The $1,000 or $2,000 Obama claims he will save ordinary Americans will be gone in a nanosecond on deferred purchases. And while we are at it, did you get the middle-class tax cut the Democrats promised you in 2006? Of course not; and chances are they will be unable to give you one in 2009 either considering a projected $400 billion deficit.

 

In November, if the Democrats win, ordinary Americans will be no closer to the American Dream than they ever were. What ordinary Americans want is that dream – a dream of financial independence not some meaningless tax cut immediately spent on the increased costs of products and services.

 

The American people are not stupid; they just have been duped into believing that letting their Federal government takes 15.3% of their lifetime income in payroll taxes just to have no investment to show for that investment at retirement is somehow the best they can expect from their politicians. This is a tragic mistake for a country operating their economy under capitalism.

 

An average household in America makes more than $50,000 a year and have $7,500 withheld in payroll taxes. In 40 years that $7,500 amounts to an investment in the government of $300,000. If that amount had been invested weekly in the stock market it would have grown at average rates of return for indexed stocks into $4,004,000 nest egg in 40 years and generate a $33,000 a month retirement check. As Social Security now pays $1,400 a month and the taxpayer has no investment, Americans are being taken to the cleaners by those politicians wanting to retain these entitlements.

                                              

There is a way for John McCain and Sarah Palin to deliver the American Dream of financial independence to ordinary Americans. They can privatize Social Security and Medicare and annually invest the $1.4 trillion in payroll taxes in the American economy and let those funds compound into millions for each American taxpayer. That would mean we would scrap the present system and replace it with one that gives Americans the REAL CHANGE they are asking their politicians for – wealth that will enable them to retire affluently and buy the best medical care on the planet and build wealth for future generations.

 

I have written a book How to Make the Poor Rich and America Wealthier that outlines the way ordinary Americans can realize the American Dream. You can get a free copy on line at www.riseupamerica.us . It describes how Rise Up does for the poor and middle-class what “trickle down” has done for the rich.

 

By adopting the Rise Up America plan, America will avoid the tragedy that socialists will inflict on ordinary Americans in November with their deceptive plan to deliver change by draining money from those that fuel the American economy and retaining the entitlements that are draining the treasury each year.

FamilySecurityMatters.org Contributing Editor Dick McDonald is a career financial analyst, accountant and champion of establishing Personal Accounts for American workers in place of the outmoded, inefficient Social Security program. Dick maintains websites at www.dickmcdonald.blogspot.com and http://www.riseupwarrior.com/.

[itsPatAmerican]

to view everything through a partisan screen is to miss the whole picture.

[K-oneTexas]

I'm just using the data that is put out now and was historically there.

I realize other factors are involved and folks are hurting, however until you have the same factor to compare ... you can not compare apples to apples.

What are these factors and how are they and were they measured? Data is best to compare not feelings. Dems are great on feelings but lack on fact. I am not saying you are that way and I do understand you.

When I was a kid I worked in a steel mill. I had to belong to the union and pay dues. The union always would come back and say we fought for you and got you that raise. Yeah and the price of bread went up at the corner store a nickle too. I do understand.

[politicket]

Yes, it bails out the crooks who have made a killing putting us in this position.

That is true. And it also stopped a bank run that would have taken place on Friday and expanded internationally over the weekend.

I can undersand why they did it, but the frustrating part is it's not going to work and the American public doesn't have a clue about that.

[jude24]

The question is, do today’s Americans have the make-do spirit, thrift, and grit to bear a Depression.

Not everyone in the 1930's did either? Ever read The Grapes of Wrath? Or recall how popular Huey Long and Father Coughlin were?

[K-oneTexas]

I would never wish a repeat of the Great Depression on anyone.

[dalereed]

“do today’s Americans have the make-do spirit, thrift, and grit to bear a Depression.”

They will either learn to or they can lay down in the street and die!

[dfwgator]

Or recall how popular Huey Long

Dr. Weiss did this country a huge favor.

[K-oneTexas]

The privatization has already been done by Congress (Fannie Mae, Freddie Mac and AIG). The only way for the people to stop it it to elect all now Congressional representative in November to undo the legislation. Or somehow get the USSC to declare it unconstitutional ... who has standing to file the lawsuit?

[kcvl]

When you factor in underemployment, people are hurting more than that 5% unemployment figure indicates.

When you factor in people who are getting unemployment who are still working I don't trust any figures the government or 'news' organizations put out.

SOME people know how many days they can work in order to apply for unemployment and they work just enough to get it. SOME people work harder at manipulating the system than they do at a 'job'.

No wonder companies want to hire Mexicans who actually do show up day after day after day.

I can't tell you how many inquiries are filled out for 'employees' who lie about how many days they have worked in order to apply for unemployment (some working under the table and/or part-time).

SOME companies would rather okay the unemployment than to deal with the hassle so the 'employees' take full advantage of that too.

SOME people are just lazy bums and nothing will ever change that, nothing. But, rewarding that kind of behavior doesn't help either.

[Texas_shutterbug]

I used the word, "feel", but it is a fact. We have less disposable income than when George Bush became president. So do many other Americans, and that's not counting the ones who are in debt up to their eyeballs.

I'm presently a conservative without a party.

[K-oneTexas]

I agree, no bailouts. It is not the governments job, they are saving their “friends”. And it is both Pubbies and Dems who are doing it, not just Dems.

[Texas_shutterbug]

But you don't really think there won't be more bailouts, do you?

We've only just started.

[bazbo]

I didn’t see it as a political rant but a clarification of which choices we currently have that would be more likely to attempt to remedy the economy.

What would be another solution considering “this economy doesn’t currently have time...”?

As a start, the American people need to look at the distasteful facts such as presented at this URL
http://www.federalbudget.com/

How this is accomplished may be part of the theme of Mr McDonald’s book. I have read the chapter titles and look forward to further reading. Thanks for at least making an attempt to make us aware.

May God continue to bless...

[JLS]

In 1929, men flew out of windows because they lost their highly leveraged bets (you only had to put up 10% to buy stock).

This is all one needs to read of this article. It shows the author has not read _A Monetary History of the United States 1867 to 1960_ by Milton Friedman and Anna Schwartz. Or perhaps the author read it but did not pay attention.

One of the many things Friedman and Schwartz debunked in that seminal volume was the myth of the mass suicides on Wall Street around the crash. There was no increase in the NYC suicide rate. There was maybe one example of someone identified with Wall Street who killed himself. If you begin your article repeating myths that have been debunked, how can anyone take you seriously?

[Logical me]

In 2008, instead of dead bodies on the pavement we have the “financiers” retreating to the Hamptons to spend their millions.

The only difference now is that if a desprssion happens, we know who caused it. The Hamptons will not be a very safe retreat.

[stockpirate]

“In 1929, men flew out of windows because they lost their highly leveraged bets”

Urban legend!

Not true.

False.

Unfounded.

[dalereed]

I would never wish a repeat of the Great Depression on anyone.”

Having grown up in the last one I truly believe that we have 3 generations that absolutely need to be smacked between the eyes with a depression.

People living on credit has got to stop.

[K-oneTexas]

Good I like that, is there more. How do the facts of today pertain to the facts of the Great Depression?

I'm a great fan of Friedman, thanks for bringing that up.

[K-oneTexas]

An Act of Congress in 1997 started it all off with Zero down, no job, no credit = NO WORRY, The house is yours.

[K-oneTexas]

More, with a Dem in charge very possible. With McCain their, and my fingers are crossed, less possible. Somehow we need to get through the next 4-8 years and hopefully more things back on the pendulum swing the other way. USSC justices, more conservatives locally and in Congress would be a start.