Life in the United States in the 1920’s was a time where the wealth gap expanded extensively and companies increased in value without physically growing in production. The 1930’s began with a natural recession in the economic cycle, however, due an unfortunate series of events, this recession slid further into a depression. Multiple European banks failed, leaving the U.S. out of hundreds of millions of dollars, new technology and international competition led to overproduction in multiple industries, and eighty percent of the population had no life savings due to many buying stocks on margin. Five percent of the population accounting for a third of all total wealth led to a consumer economy where only few could consume. President Herbert
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The most hurtful aspect of this body of legislation was the ridiculous taxes that were necessary to fund FDR’s programs. One of these taxes was the excise tax which targeted additional taxing on everyday commodities such as gum, alcohol, phone calls, radios, and electricity. It was also noted in a Treasury Department report that, “excise tax fell disproportionately on the less affluent.” In fact, citizens had to pay this excise tax to be able to listen to FDR’s fireside chats! This and social security taxing caused everyday citizens to have less money to spend and employers to have less money for job growth. From 1933 to 1940, federal taxes more than tripled, going from one point six billion to five point three billion. New Deal jobs were only created by outrageous taxing which made labor more expensive, destroying established jobs. Even in 1939, unemployment was still over seventeen percent. Also, due to FDR’s forced, collective unionization, there were fourteen million strikes in 1937 and twenty eight million in 1938. The modern day, economist’s understanding of the New Deal is that it only made the depression longer and deeper since it prevented normal recovery by rising wages and restricting employment. It is estimated that unemployment would be at least eight percent lower in 1940 if the New Deal had never happened. FDR’s strategy was flawed from the beginning because cutting production and raising taxes only yields less jobs and more unemployment. Economists also understand that WWII ended the Great Depression and without it, the country would have sunk further and further into debt because FDR annually averaged a modern day one hundred and ten million dollar increase in deficit spending throughout his twelve years in office. On his quest to provide relief for those most effected by the depression, FDR only prolonged the
The most hurtful aspect of this body of legislation was the ridiculous taxes that were necessary to fund FDR’s programs. One of these taxes was the excise tax which targeted additional taxing on everyday commodities such as gum, alcohol, phone calls, radios, and electricity. It was also noted in a Treasury Department report that, “excise tax fell disproportionately on the less affluent.” In fact, citizens had to pay this excise tax to be able to listen to FDR’s fireside chats! This and social security taxing caused everyday citizens to have less money to spend and employers to have less money for job growth. From 1933 to 1940, federal taxes more than tripled, going from one point six billion to five point three billion. New Deal jobs were only created by outrageous taxing which made labor more expensive, destroying established jobs. Even in 1939, unemployment was still over seventeen percent. Also, due to FDR’s forced, collective unionization, there were fourteen million strikes in 1937 and twenty eight million in 1938. The modern day, economist’s understanding of the New Deal is that it only made the depression longer and deeper since it prevented normal recovery by rising wages and restricting employment. It is estimated that unemployment would be at least eight percent lower in 1940 if the New Deal had never happened. FDR’s strategy was flawed from the beginning because cutting production and raising taxes only yields less jobs and more unemployment. Economists also understand that WWII ended the Great Depression and without it, the country would have sunk further and further into debt because FDR annually averaged a modern day one hundred and ten million dollar increase in deficit spending throughout his twelve years in office. On his quest to provide relief for those most effected by the depression, FDR only prolonged the