“Blessed are the young, for they shall inherit the national debt.” – President Herbert Hoover
The Hoover administration thought there was no room and was ideologically opposed to fiscal expansion to stimulate aggregate demand. Furthermore, Keynesian theory was not even developed at the time. The General Theory of Employment, Interest and Money was not published until February 1936.
A policy error, partially due out of ignorance, that led to the Great Depression, though it was monetary policy and the Fed’s failure as “lender of last resort” that “put the Great in the Great Depression.”
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