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Repeating Mistakes of the Great Depression   March 16th, 2009
Democrats seem to want to repeat the Great Depression       

 
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Increased deficit spending, higher taxes, and protectionism--all mistakes of the Great Depression that Democrats seem to want to repeat. I'm constantly amazed at how the Democrats look to the Great Depression as a textbook example of their policies being successful while most of the world tends to want to avoid a replay of that economic crisis.

One of the aspects of the Great Depression that is almost universally accepted as having aggravated the problem was the Smoot-Hawley Tariff Act that raised U.S. tariffs on many imported goods--ostensibly to protect American jobs. Instead, a full-blown international trade war ensued with countries around the world raising their own tariffs in retaliation. U.S. imports dropped 66% and exports fell 61% which led to even less demand and higher unemployment.

The Democrats are taking us down this road again.

The $410 billion appropriations bill they just passed canceled a bilateral commercial trucking project that is stipulated in NAFTA. Mexico had warned that they would treat this as U.S. protectionism and would retaliate with increased tariffs on U.S. goods imported to Mexico. They now have done exactly that:

Mexico has announced plans to raise tariffs on almost 90 U.S. exports, Mexican and U.S. officials confirmed Monday.

The new trade measures are in retaliation for the cancellation earlier this year of a U.S. commercial trucking project, Mexico's state-run news agency said, and will target U.S. industrial and agricultural products delivered to Mexico.

Mexico's Economic Secretary Gerardo Ruiz Mateos called the cancellation of the program a breach of the North American Free Trade Agreement (NAFTA), the agency said.


So President Obama has been in office less than two months and has already just barely avoided a worldwide trade war (due to the "Buy U.S." provision that was ultimately dropped from the stimulus package), narrowly avoided offending Canada regarding his intentions to "renegotiate" NAFTA, and has now initiated a trade war with Mexico.

Add to that the massive $787 billion spending bill in the spirit of FDR's "New Deal" government spending projects, and tax increases on the wealthy in the spirit of Hoover's draconian tax increases... it really seems like the Democrats are treating the 1930's as a textbook example of what we should do and are trying to repeat the Great Depression rather than learning from the past to try to avoid repeating the same mistakes.

From what I've read the Great Depression was not a fun time. Why are Democrats so intent on repeating it?

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