The Hoover Democrats of 2011 via @michaelpleahy

By: Michael Patrick Leahy August 06, 2011

Michael Patrick Leahy

At the height of the Depression in June, 1932, Republican President Herbert Hoover decided it was finally time to pay for the additional $1 billion of spending he had persuaded Congress to authorize earlier in the year.  The economy was in a downward spiral, having shrunk 20% annually since the Crash of 1929. Unemployment was nearing 20%.

The fiscal year was just coming to an end, and it wasn’t a pretty site. Revenues had plummetted to $1.9 billion, as expenditures jumped to $4.6 billion. The resulting $2.7 billion deficit was the highest in the history of peace time America.

Hoover’s solution for the slide in revenue was to increase income taxes across the board, but especially for the “wealthy.” He persuaded Congress to pass the Revenue Act of 1932 just as the new fiscal year began, and he sat back, waiting for the extra revenues to start rolling in.

Why wouldn’t they?

After all, tax rates for those earning more than $1 million a year increased from 25% to 63%.  At every level, the tax code was made “fairer” and more progressive.  Estate taxes were doubled, and corporate taxes were also increased.

But a funny thing happened.

Total revenue didn’t increase a penny. The next fiscal year was a mirror of the previous pre-tax increase fiscal year–revenues remained stagnant at $1.9 billion, expenditures were kept at $4.6 billion, and an additional $2.7 billion was added to the deficit.

Barack Obama’s insistence that we increase taxes now on “the wealthy” because “it’s only fair” echoes the rhetoric Hoover used to secure Congressional passage of his ill advised and ineffective tax increase.

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Spending Insanely While the Economy Collapses

SUNDAY, 26 JUNE 2011 06:13 ALAN CARUBA
Right Side News

America is a sovereign nation, a constitutional Republic that will celebrate the 235th anniversary of its declaration of independence in 1776 and the 223rd anniversary of its Constitution which became effective when the State of New Hampshire became the ninth State to ratify it in 1788.

By most indications it is a nation in its death throes. Its original values and virtues are being jettisoned and that is always a sign of internal rot. The passage of a law legalizing gay, same-sex marriage in New York State is just one example. It becomes the sixth State to do so.

Families are regarded as the keystone to a healthy society. When they begin to disintegrate or are redefined as same-sex, most observers conclude that a range of social problems will ensue.

The Census Bureau recently announced that married couples no longer head a majority of families in the United States. They now represent only 48% of households, based on data from the 2010 census. It is the first time this has ever occurred.

The 2008-2009 financial crisis was a wake-up call. The nation has been through such crises in the past including the Great Depression from 1929 until the start of World War Two in 1941. The present administration, Congress, and Federal Reserve has responded in much the same way it did in the past and, not surprisingly, the economy has not responded to a flood of “quantitative easing”, governmental make-work programs, and similar efforts.

As Ronald Reagan told us, government is not the answer, government is the problem.

Let me share just a few examples of what is so terribly wrong.

The U.S. Department of Transportation cancelled a $1.2 million federal highway program that would have sent employees on a 17-day globe-trotting journal “to photograph different billboards” after ABC News told the Department it planned to air a report on it. The program has been around for a decade, allegedly to study how other countries handle their major highway networks, motorcycle safety, managing pavement, and “adapting to climate change.”

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