7 votes

The Depression You've Never Heard Of: 1920-1921

I saw this article a few years ago but find it very relevant today. Dr. Paul would talk about this during his campaigns and I found it one of the best history examples to share with people to convince them what it is this country needs to do.

"...Here the government and Fed did the exact opposite of what the experts now recommend. We have just about the closest thing to a controlled experiment in macroeconomics that one could desire.....the government slashed its budget tremendously, and the Fed hiked rates to record highs...............To restore fiscal and price sanity, the authorities implemented what today strikes us as incredibly “merciless” policies. From FY 1919 to 1920, federal spending was slashed from $18.5 billion to $6.4 billion—a 65 percent reduction in one year. The budget was pushed down the next two years as well, to $3.3 billion in FY 1922................To be sure, the 1920–1921 depression was painful. The unemployment rate peaked at 11.7 percent in 1921. But it had dropped to 6.7 percent by the following year, and was down to 2.4 percent by 1923. After the depression the United States proceeded to enjoy the “Roaring Twenties,” arguably the most prosperous decade in the country’s history."


Trending on the Web

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
ecorob's picture

Very relevant...

even today!

its 'cos I owe ya, my young friend...
Rockin' the FREE world in Tennessee since 1957!
9/11 Truth.

Talk by Tom Woods (at and of

Talk by Tom Woods (at and of the Mises Institute)

"Why You've Never Heard of the Great Depression of 1920 | Thomas E. Woods, Jr."


Really love this talk <3






Thanks for posting.

What would the Founders do?

Dr. Paul would say yes, it

Dr. Paul would say yes, it was severe but only lasted about a year.