A Depression That Wasn't Great

Which U.S. President was our greatest depression fighter? FDR? Wrong! It was Warren G. Harding.

Republican President Harding inherited Democrat President Woodrow Wilson's "depression" coming out of World War I. Wilson had built up huge Federal bureaucracies, imprisoned dissenters, and ran up $25 billion dollars in Federal debt. Near the end of Wilson's Administration the Gross National Product dropped by 24% and the number of unemployed people rose from 2.1 million to 4.9 million.
Harding did not like high taxes, government waste, excessive government spending, and government interference in private businesses. Harding, in 1920, ran on a platform of "less government in business". After his election, Harding cut Federal Spending from $6.3 billion in 1920 to $3.2 billion in 1922 and taxes from $6.6 billion in 1920 to $4 billion in 1922. At the same time the government started to pay down it's debt while income tax revenue to the government actually fell. Unemployment fell until it reached the all-time historical peacetime low of 1.8% in 1926. The economy boomed. The Gross National Product grew year after year, Productivity rose, real wages increased, and the Stock market tripled in value. Missing was the business bashing that became so prevalent in FDR's later speeches. Harding managed to do most of this in about 3 years.
FDR's policies of Government regulation, tax increases, huge increases in Government Spending, and make work programs caused the Great Depression, which started in the early 1930's to last until the start of the World War II. A period of about 10 years.

President Obama should take a long hard look at the effects of both methods for dealing with economic downturns before embarking on a program similar to FDR"s.

A lot of this information I gleaned from Jim Powell's column in the 1/11/09 Waterbury Republican newspaper.