Policy makers continue to advocate deficit spending and Government intervention as a solution to The Affordable Mortgage Depression in defiance of historical lessons and common sense.

During the Great Depression Government initiatives designed to stabilize the economy through compensation controls, stimulus spending, efforts to boost employment and Federal regulation failed completely.  The only material impact this intervention had on the economy was to make the downturn longer and deeper.

The following three excerpts are from the book “Liberty and Tyranny” by Mark Levin and brilliantly qualify the historical failure of Government economic intervention during The Depression.

1.  The National Industrial Recovery Act (NIRA) in June 1933 forced manufacturing industries into government mandated cartels and empowered a massive federal bureaucracy to dictate production and pricing standards covering two million employers and 22 million workers.  The Supreme Court eventually ruled the act unconstitutional, but the damage had been done.  Industrial production dropped 25% in the six months after the law had passed.

2.  Roosevelt’s treasury secretary, Henry Morgenthau, Jr. wrote:

“we have tried spending money.  We are spending more than we have ever spent before and it does not work…  We have never made good on our promises…  I say after eight years of this Administration we have just as much unemployment as when we started…  and an enormous debt to boot!”

3.  According to an extensive 2004 study by UCLA economists Harold Cole and Lee Ohanian, Roosevelt’s “ill-conceived stimulus policies” extended the Depression by seven years.