Have you heard the news?! Obama saved us from another Great Depression. Also, FDR got us out of the actual Great Depression. Whatever you do, don’t take 2 seconds to consider the fact that these have been the only two sustained downturns in the US economy in modern history and wonder why that might be. All you need to know is that according to liberal economic history, the natural state of recessions is that they never end.
However, if you do want to take 2 seconds to think about it, it does start to seem a bit absurd. Why would FDR and Obama get credit for “saving” us when they’ve been in charge the only two times a downturn hasn’t been followed by a rapid recovery? Is it a coincidence that they both used the same type of policies and the exact same philosophy? Here are a couple interesting case studies.
Recession of 1920
Did you know that in 1920 there was a recession just as severe as the one that started the Great Depression? Here is a chart of the time period
From 1920 to 1921 GDP dropped from around $88B to $73B (-$15B), from 1929 to 1930 it dropped from about $103B to $92B (-$11B).
Unemployment in 1920/1921 rose from 5.2% to 11.7%
Unemployment in 1929/1930 rose from 3.2% to 8.9%
All of these numbers are very comparable, with the 1920 recession starting out a little bit more severe. The 1920 recession also saw 18% deflation and a 47% drop in the stock market. It was nasty. But Harding/Coolidge just cut taxes and didn’t try to interfere. And instead of the Great Depression, the chart shows the huge GDP growth and unemployment got down into the 2’s. They also drastically cut spending, and the national debt decreased every single year under Harding/Coolidge.
So, very comparable recessions. Tax cuts/spending cuts/staying out of the way = Roaring 20’s. Tax increases/government stimulus/massive government intervention = Great Depression of the 1930’s.
Recessions of 1979-1982
Now, believe it or not, there were other recessions between the Great Depression and the recession Obama inherited. And against all odds, those recessions ended. Obama likes to say he inherited the worst recession since the Great Depression, because that makes it seem like he sucks less. However, the economic conditions Reagan inherited were just as bad and maybe worse. Here is a comparison of GDP
The recession of the early 80’s jerked around a bit, but was about the same severity. However, it quickly rebounded to 8+% growth for a full year and there was uninterrupted growth until the Q4 of 1990. Obama spent a trillion dollars and got growth in the 3’s for a couple quarters and we’ve stagnated between 0%-3% since then and we’ve started slowing down again.
Here is a comparison of unemployment
In 1982, unemployment reached 10.8% and then shot sharply down. In 2009, it reached 10.1% and has been over 8% for 40 straight months (the longest period since the Depression). And it’s only come down because the Bureau of Labor Statistics keeps deciding not to count hundreds of thousands of unemployed people because they’ve “given up” looking for jobs. Reagan also inherited inflation rates that reached 13.5% and gas shortages.
So, very comparable recessions. Tax cuts/staying out of the way = the 80’s economic boom. Government stimulus/massive government intervention = The Great Recession / The Obama non-Recovery.
Of course liberals argue that you can’t compare these cases, because….well…if you compare them, you realize how terrible their policies are. They have to argue that 1930 and 2009 were fundamentally different from every other recession ever because there is no other defense. Their only chance is to hope they can convince people that 1930 and 2009 were the only economic downturns we’ve ever faced and that the natural state of recessions is that they never end. The truth is, they only become depression and economic stagnation if the government tries to fix it. The only thing FDR and Obama saved us from was/is economic recoveries.