A brief economic history lesson.

Everybody knows about the market crash in 1929 which sparked the Great Depression. What happened afterwards is somewhat less-known though.

Herbert Hoover did not spend any government money to deal with the depression, being a firm believer in free market economics, which unfortunately did nothing to ease the depression at all. Franklin Roosevelt, who became president in 1933, was a big spender who poured tons of government money into federal programs. And what many people do not realize is that his efforts were mostly successful. By 1936, the depression had eased considerably and the economic forecast was a positive one.

Then Roosevelt and Congress made a major mistake in 1937. Fearful of the huge federal deficit which had been caused by the president’s spending, they balanced the budget and drastically cut spending, intended to eliminate the federal deficit. Money dried up immediately and the economy crashed a second time, the classic “double-dip recession.”

This second recession lasted until 1942 when the United States’ entry into World War II forced another round of big government spending, increasing the deficit considerably. But that spending caused a complete end to the depression/recession, and the start of the country’s greatest economic growth spurt in many years, perhaps ever.

So what lesson can be learned from this? Several, actually:

• first, most economic historians are agreed that struggling to control the deficit in the midst of a slowly-recovering recession is not only counter-productive, but more likely to worsen the recession than increase it;

• second, members of Congress are totally ignorant about economic history, but are acting out of pure emotions (I balance my house budget; the country should balance its budget as well!) rather than common sense and any knowledge of history;

• third, the Tea Party members are the most ignorant people of all, leading the push to balance the budget in spite of the recession. Their refusal to compromise, along with the Republican hierarchy’s inability to control them, is the worst trend this country has seen in a very long time.

The question is: who will the public blame if the economy crashes again? The Republicans who forced the government to cut its spending? The Democrats who were too wimpy to fight the Republicans’ counter-productive economic policies? The president who decided that compromise was more important than sticking by his economic guns?

It doesn’t matter. Because none of them will suffer no matter what the outcome. Elected politicians have guaranteed themselves such a sweet deal in salaries, benefits, and pensions that no matter how badly the economy crashes, they will still prosper. So will rich people since Congress has done everything possible to make sure they do not spend a bit of their discretionary money aiding the economy.

No, the suffering will be mostly by the middle class and the lower class, the people who (1) can least afford to suffer, and (2) mostly disagreed with cutting the deficit and screwing the economy. Remember Lincoln’s quote in the Gettysburg Address, that “government of the people, by the people, for the people, shall not perish from the earth”? What does that say about a government of the rich, by the rich and for the rich? Look at any Third World country for the answer to that.