Liberal Forum

But your graph is misleading. The Unemployment rate really started diving in 1940, which of course was the war. It didn't start diving due to FDR's New Deal and Second New Deal plans. In fact, there is no immediate way of showing whether those plans really had a meaningfull impact because government stimulus plans don't go into fruitation the moment they are implemented. It takes years to see if anything came from them. Below is an example of how cutting spending and cutting taxes can and does work. http://www.sodahead.com/united-states/the-other-great-depression-1920-1921-or-the-not-so-great-depression/blog-299507/ Harding's Secretary of Commerce Herbert Hoover wanted government intervention in the economy which as president he was to pursue when he faced the Great Depression a decade later but Harding would have none of it. He insisted that relief measures were a local responsibility. Federal spending was cut from $6.3 billion in 1920 to $5 billion in 1921 and $3.2 billion in 1922. Federal taxes fell from $6.6 billion in 1920 to $5.5 billion in 1921 and $4 billion in 1922. Harding's policies started a trend. The low point for federal taxes was reached in 1924; for federal spending, in1925. The federal government paid off debt, which had been $24.2 billion in 1920, and it continued to decline until 1930.