I have repeatedly praised Ronald Reagan.
I have also praised Calvin Coolidge several times.
And I even once extolled the virtues of Grover Cleveland.
Today we are going to celebrate the financial achievements of Warren Harding.
Most notably, as this chart based on OMB data illustrates, he presided over a period of remarkable spending discipline.
Harding also initiated very large and very effective tax rate cuts.
And his program of less government and lower taxes helped end a massive economic downturn quickly (unlike the policies of the great governments of Hoover and Roosevelt, which deepened and prolonged the Great Depression).
In an article for National exam last year, Kyle Smith praised President Harding’s economic management.
In a moment of national crisis, Warren G. Harding restored the economic health of the United States. … In 1921, America was in a state of crisis, reeling from the worst recession in half a century, the most severe deflationary spiral on record… Unemployment, it is now estimated, was between 8, 7 and 11.7% as returning soldiers inflated the size of the working-age population.
Between 1919 and August 1921, the Dow Jones average fell 47%. Harding’s response to this emergency has largely been to let the cycle play out. … The recession ended in the middle of the year and periods of prosperity followed. Harding and Congress cut federal spending nearly in half, from 6.5% of GDP to 3.5%. The top tax rate has been reduced from 73% to 25% and the tax base has broadened. Unemployment has come down to around 2 to 4 percent. … Harding was a resounding success in a historically important role as an anti-Wilson: he restored a classically liberal, rights-oriented and limited government, and deserves immense credit for the economic boom that began during its first year and continued throughout the rest. of the 1920s.
Smith’s article also praises Harding for overturning some of Woodrow Wilson’s most odious policies, such as racial discrimination and jailing political opponents (Wilson also had a terrible record on economic issues).
Now let’s look at some excerpts from a new article written by Vance Ginn of the Texas Public Policy Foundation and John Hendrickson of the Iowans for Tax Relief Foundation.
President Harding took office in 1921 when the country was suffering from a severe, unrecognized economic depression. High tax rates and a large national debt after World War I hampered growth.
… President Harding’s main economic policy was to control spending, reduce tax rates and pay down the debt. Harding…understood that any meaningful tax and debt reduction could not happen without spending cuts. … Not only was Harding successful in this first attempt to cut government spending, but his efforts resulted in “more than $1.5 billion less than actual expenditures for the year 1921.” …The decade had started in the Depression and by 1923 the national economy was booming with low unemployment.
Incidentally, the reduction of over $1.5 billion between 1921 and 1922 may not seem like much, but it was a 30% reduction in the size of government (and that was back then where the government was a relatively small burden).
This would amount to cutting more than $1.5 trillion from the federal budget this year.
What a great idea – maybe even better than my other libertarian fantasy.
PS Thomas Sowell praised Harding’s economic policies.
PPS And I applauded Bill Clinton’s economic policies. Or, to be more precise, I praised the policies that were adopted during his presidency.
This Liberty International article has been republished with permission.