welsch@houxu.UUCP (Larry Welsch) (01/28/85)
Laura, You write: > You are going to have to do some reading of economic history. You have > your facts wrong. You have your facts wrong. > First of all, you do not appear to know where Social Security came from, > both globally, and in the United States, and secondly you do not appear to > know where the depression came from. Social Security was first started in Germany under Bismark. By the 1920's "The most advanced capitalist country [USA] lacked a system of social security that every advanced industrial country in Europe took for granted..." (Encyclopedia Britannica, 1978). Yes, I know of Townsend and his role in the USA. However, you site only one of Townsend's claims. He also claimed exactly what I claimed, ie. that people needed protection from economic set backs occurring when they had gotten older. I never said there was only one reason for SS. > The Depression was *caused* by government meddling -- in the forms of > taxes, tarrifs, and most especially by how it enabled banks to inflate > their currency (something now reserved for the government alone). > Inflation causes depressions. This is an interesting view since US government policies prior to the depression can be characterized as "laisez-faire" which is hardly meddling. Economist John Kenneth Galbraith in "The Great Crash" says there are five main factors causing the depression. They are 1) Unequal income distribution, 2) Fraudulent business 3) The banking structure 4) Unwise foreign lending and the creditor position of the US 5) Poor state of economic intelligence. Economist Charles P. Kindleberger in "The World Depression 1929-1939" says the depression was caused by the unwillingness of US policymakers to take responsibility for international financial stability and intervene. Neither state that government meddling was a cause of the depression. Ah, "TANSTAAFL" I like Heinlein, and he is one of my favorite fiction writers. I even believe in "There ain't no such thing as a free lunch." The problem that Townsend was addressing was that there are people who believe in free lunches and accumulate wealth without having "earned it." As you say "Frogs don't fly" and when all the wealth goes into the hands of nonproducers and the producers can no longer do anything then there are problems. What Townsend was suggesting was a means of getting some of the wealth back into the hands of the producers. Unless this happens capitalism will break down. This was what happened during the great depression. You also talk a lot about inflation. The depression was not a period of inflation in the USA, but one of deflation. People just didn't have money. If I look at Germany between the wars and Latin America and Israel today, I see the causes of inflation. Overwhelming deficits and huge defense outlays. It seems to me that if the USA wishes to prevent another round of inflation these are the two problems that should be attacked, not social security. Larry Welsch houxu!welsch