Dr. Richard Ebling writing for Capitalism Magazine explained in detail how the Federal Government caused America’s Great Depression. It’s a bit of a slog to get through his clear explanation but in a nutshell he proves how the federal government caused the great depression and has distorted the economy as long as the fed has attempted but failed to manage the economy. What government does is print money when the Consumer Price Index goes down too fast and takes money out of circulation when the CPI goes up too fast.
A big, big problem happens when a major part of the economy, say the steel industry figures out how to lower the cost of steel. Customers buy the less expensive steel but the government only sees the lower prices and reacts as if the economy is in trouble. They increase the cost to do business which they think means they have helped the economy but what they did increased the cost of steel. Instead of helping the country they hurt it by artificially forcing steel to be more expensive than it should be.
All the government has to do about money is to make sure no one is stealing it. They need to be kept out of the economy because it’s impossible to manage the economy of America so anything they do screws up the economy. See Dr Ebling’s article HERE.
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