I’ve commented many times about the misguided big-government policies of both Hoover and FDR, so I can say with considerable admiration that this new video from the Center for Freedom and Prosperity packs an amazing amount of solid info into about five minutes.

Perhaps the most surprising revelation in the video, at least to everyone other than economic historians, is that America suffered a harsh depression after World War I, with GDP falling by a staggering 24 percent.

But we don’t read much about that downturn in the history books, in large part because it ended so quickly.

The key question, though, is why did that depression end quickly while the Great Depression dragged on for a decade? (more…)

America is in shambles from sea to shining sea. Unemployment is at Great Depression levels. Real Estate is collapsing. The stock market is crumbling. Retail sales are vanishing. Consumer confidence is plummeting. Inflation is skyrocketing (on the products that matter- energy and food prices). And of course, our U.S. Triple A credit rating is gone for the first time in history.

America is staring at economic disaster- Obamageddon. We are the Titanic, headed straight for the iceberg. Even delusional 500 point up days on Wall Street will not change the frightening long term picture. The iceberg is straight ahead.

Obama and his socialist cabal have channeled Hoover and FDR, who turned an ordinary bust into The Great Depression with a toxic strategy of more government, more spending, more debt, more entitlements, more rules and regulations strangling business, higher minimum wages, more power to unions, higher taxes, more printing of money by Fed, and trade tariffs. This is the Obama blueprint squared.

Here’s where the story gets downright frightening. This time the results are going to be dramatically worse than 1929. This time we are facing The Greatest Depression ever. Obamageddon.

Why? Because The Great Depression had NONE of problems and obligations we are now facing.

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As Congress recklessly moves to enact evermore programs in the face of ever larger deficits, it is only a matter of time before they take up the revenue side of deficit equation: Spending – Tax Revenue = the Deficit.  Of course, in response to rising deficits, the Media and the Democrats will reflexively demand tax increases. Republicans, for their part, simply must be able to articulate why higher taxes will actually result in larger deficits not smaller.

I offer this common sense guide for the great battle to come.

At the outset, it must be noted that, in practice, politicians don’t actually raise taxes so much as they pass laws to increase tax “rates,” i.e. income rates, sales tax rates, etc.  They do in an ill-founded pursuit of more tax revenue.

It is ill-founded because tax rate increases, over time, yield less revenue than tax rate cuts.  For instance, when the economy was bad in the early 1990’s, the California legislature raised tax rates and over a 3 year period, revenues actually dropped.  By 1999, Bill Clinton’s tax rate increase resulted in the highest overall tax burden in our history – a recession naturally followed which led to declining revenues.

These common sense points explain why tax rate cuts, over time, will raise for more money than tax rate increases.

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