/lit/ - Literature

>>930826
>The UTTER CERTAINTY that you know the SOLE cause of the Great Depression (Big Government) and the reason for its duration (BIg Government).
>Doesn't understand the business cycle

In issuing fiduciary media, by which I mean bank notes without gold backing or current accounts which are not entirely backed by gold reserves, the banks are in a position to expand credit considerably. The creation of these additional fiduciary media permits them to extend credit well beyond the limit set by their own assets and by the funds entrusted to them by their clients. They intervene on the market in this case as "suppliers" of additional credit, created by themselves, and they thus produce a lowering of the rate of interest, which falls below the level at which it would have been without their intervention. The lowering of the rate of interest stimulates economic activity. Projects which would not have been thought "profitable" if the rate of interest had not been influenced by the manipulations of the banks, and which, therefore, would not have been undertaken, are nevertheless found "profitable" and can be initiated.

Do you understand? Or do you need me to spell it out to you again?

As for the New Deal, unemployment remained as high as it had been in 1932 in 1940, agricultural policies such as the forced destruction of crops and dairy products drove up food price inflation and the US was in just as bad a state as it had been under Hoover (who actually began the process, contrary to popular belief, with his economic relief plan of 1932 and the biggest rise in taxation ever seen in a Western country in contemporary times.