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Libertarians – Historically Lousy Economics

Since the current Republican candidates hasten to promote “limited or no government,” I thought I would discuss the macroeconomic history of laissez faire – libertarianism of the last 150 years. This philosophy has many Ron Paul followers believing in it (and him) due to its simplicity and lack of necessity for understanding the myriad facets involved with economies of the scale found in the U.S. Unfortunately, Ron Paul’s websites etc., do not point out its failures in practice. These long-term failures can only be observed over decades, not years, to observe the abject failures that result from such simplistic theories.

Historical Reference

In the latter half of the 19th Century, we had the most non-involved Federal government, in terms of economic involvement, imaginable. The U.S. had no income taxes, no anti-trust laws, no effective unions, no minimum wages, no Federal Reserve nor any fiscal spending such as Medicare and Social Security.

Individual wealth and large monopolies had developed because of the tendencies of essentially unregulated Capitalism to spawn fraud and deception on a working citizenry. Approximately 4,500 families owned most of the wealth in the country. Because of this concentration and lack of money, there were severe recessions-panics in 1837, 1857, 1873, 1873-79, 1892-6, 1904 and 1907, cumulating in the Great Depression of the 1930’s.

Government involvement in the economy really began with the largest government spending programs of WW II, followed by the Federal Highway System and the GI bill giving free education and reasonable home loans to many. This was the beginning of one of the best economies in the history of the world.

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