Austerity Hardly To Blame
Re: "Harper rejects warnings austerity will spark recession," The Journal, Sept. 28.
Former U.S. president Herbert Hoover did not practice austerity, so it is incorrect for politicians to claim that he "helped plunge his country into the Great Depression through austerity measures."
Hoover's administration increased federal government spending from three per cent of the U.S. economy in 1929, the year he took office, to eight per cent in 1933, the year he left office.
The U.S. budget deficit became so large as a result that by 1932, the country's government was spending more than $2 for every dollar it took in.
It was not austerity that caused the Great Depression, but misguided government meddling in the economy, such as the Smoot-Hawley Tariff of 1930.
That increased tariff backed by Hoover ignited devastating trade wars between the U.S. and other countries that wiped out countless jobs.