May 28, 2022

Herbert Hoover Economics?

Timeline of Government revenues versus governm...
Timeline of Government revenues versus government outlays (or spending) as a percentage of GDP. (Photo credit: Wikipedia)

Is cutting spending what led us into the Great Depression?  Certain economists would like us to think so.  The problem is, that idea runs counter to reality:

From 1924 to 1928 Uncle Sam’s real per-capita spending fell by 4.3 percent. But this spending rose significantly during Hoover’s term in the White House. From 1928 to 1929 real per-capita spending rose by 4.7 percent; from 1929-30 by 8.0 percent; from 1930-31 by 17.2 percent; and from 1931-32 by 15.8 percent. (This spending rose by another 28.4 percent from 1932-33.) The overall increase in real per-capita spending from 1928 to 1932 was a whopping 53.5 percent. Real per-capita spending excluding outlays for defense and interest on government debt increased during Hoover’s years in office even more dramatically, skyrocketing by 130 percent. [Economist Don Broudreaux – HT Say Anything]

Before we go pointing finger pointing we better make sure we know the facts—and what the facts really are.

Spending more than you have, consistently, has never made anyone richer and has made many poorer.  It will be the downfall of this country if we don’t right this wrong—the sooner the better.

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