This article was written by Brandon Smith and originally published at Birch Gold Group
The concept of infrastructure stimulus has been hyped for decades as a kind of cure-all for economic decline. The propaganda runs parallel to the narrative of the “savior” of the Great Depression, Franklin Delano Roosevelt. In fact, one cannot examine the presidency of FDR without being bombarded with one sided worship of infrastructure spending and the “New Deal.”
The New Deal is often credited in left-leaning literature as being the singular cure for the depression, and FDR by extension has been handed messiah status among leftists. The New Deal is supposedly proof that massive socialized federal and central bank interventions through public works programs is an economic ambrosia. So, it’s not surprising that nearly every president since the Great Depression has argued for an unprecedented infrastructure bill when faced with economic collapse. A large portion of the public on both sides of the aisle has been trained to think these programs will save us.
Biden, in particular, has made historic stimulus spending the very first platform of his administration, and consistently cites FDR and Lyndon Johnson as patron saints of his infrastructure bill. If it worked for them, then obviously it will work for him… right?
Actually, the New Deal wasn’t a great deal
In reality, the public works and welfare programs of FDR in particular had very little to do with the ending of the Great Depression. In fact, the New Deal actually made the situation worse.
Roosevelt’s own Treasury Secretary, Henry Morgenthau, lamented on May 6th, 1939 after two full terms of FDR’s presidency and stimulus programs that the New Deal was a complete failure. He stated to fellow Democrats during a session of the House Ways and Means Committee that:
“We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong… somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises… I say after eight years of this Administration we have just as much unemployment as when we started… And an enormous debt to boot!”
High unemployment and declining living standards were an epidemic in the U.S. throughout the 1930s and well into World War II. The Census Bureau outlines the dismal state of the financial system and the U.S. consumer throughout this period in its “Historical Statistics of the United States.” By 1939 the stock market had crashed on multiple occasions, car sales imploded by 30%, business closures increased by 50%, and real estate foreclosures were still near record highs. The New Deal had achieved minimal benefits of limited scope, but not much else. For the average American, it was as if nothing had changed in a decade.
That said, for certain major companies and big banks, the gains were incredible. Companies like General Electric, IBM, Proctor and Gamble and JP Morgan saw endless profits during the Great Depression while buying up smaller competitors for pennies on the dollar. Those companies involved in public works programs siphoned government money like a black hole while very little trickled down to American workers. All in all, the Great Depression was a windfall for the corporate elite as wealth was consolidated and centralized into fewer and fewer hands.
So we have to ask, if the New Deal was a failure and did nothing to solve the depression problem, what did solve it? Some historians and journalists suggest the beginning of World War II and increased defense spending saved America. This is incorrect. As noted by Robert Higgs, the U.S. standard of living continued to decline throughout World War II. It was not the beginning of the war that saved America, but “After the war genuine prosperity returned for the first time since 1929.”
How the U.S. led the world out of the war
The U.S. was one of the only industrialized nations on the planet that had been left mostly untouched by the destruction. Because of this, all other nations had to turn to the U.S. for manufacturing during the long rebuilding process. In Europe, this process carried on well into the 1950s. The U.S. had very little competition, so much so that the U.S. dollar’s reserve status increased to the point of complete dominance. If you wanted access to manufactured goods, you had to trade with the U.S., and to trade with the U.S., you had to have a stockpile of U.S. dollars.
What I see today is a change in the flow of global commerce – in the opposite direction from the post war era. Yes, trillions of dollars in stimulus measures have created a short term reversal of the pandemic collapse. In fact, there is much evidence to suggest the economy is overheating. Price inflation is becoming rampant in numerous sectors.
In the meantime, U.S. Treasuries are being dumped by foreign investors and the dollar is in decline. Central banks are now dumping the dollar, decreasing their reserves to the lowest level since 1995.
China is now the world’s largest manufacturing base, leaving very little major industry on U.S. soil. In the background, globalists are calling for a “Great Reset” of the world economy that would centralize monetary policy even further and create the foundation of a cashless society built on a digital reserve currency system.
What’s the massive infrastructure spending really about?
I believe, according to the evidence as well as past failures like the New Deal, that Biden’s infrastructure plans will accelerate the U.S. collapse instead of reversing it. The U.S. GDP might increase, but only because it is calculated to include almost every dime the government prints out of thin air and spends. Production of fiat money is not the same as real production within the economy.
Trillions of dollars in public works programs might create more jobs, but it will also inflate prices as the dollar goes into decline. So, unless wages are adjusted constantly according to price increases, people will have jobs, but still won’t be able to afford a comfortable standard of living. This leads to stagflation, in which prices continue to rise while wages and consumption stagnate.
Another Catch-22 to consider is that if inflation becomes rampant, the Federal Reserve may be compelled (or claim they are compelled) to raise interest rates significantly in a short span of time. This means an immediate slowdown in the flow of overnight loans to major banks, an immediate slowdown in loans to large and small businesses, an immediate crash in credit options for consumers, and an overall crash in consumer spending. You might recognize this as the recipe that created the 1981-1982 recession, the third-worst in the 20th century.
In other words, the choice is stagflation, or deflationary depression.
Finally, I would point out that there may also be an ulterior motive for the deluge of federal dollars into state economies through public works. Currently, Conservative states are increasingly willing to risk the consequences of returning to business as usual, regardless of federal mandates. Resistance is building against pandemic-related restrictions.
Red states are also seeing a far superior financial recovery when compared to blue states. Blue states have sabotaged themselves with lockdowns while red states have remained more open. However, the Biden Administration is hell bent on keeping pandemic restrictions in place nationwide
What if infrastructure spending plans are designed to trap red states into compliance with future covid mandates? What if the goal is to bribe these states with trillions in stimulus, but only if they submit to federal authority? I suspect that Biden’s public works bill is partially intended to be a blue state bailout, and money will be withheld from any conservative state that refuses to conform to lockdowns.
Only time will tell what the true agenda is, but this much is undeniable given the facts at hand: Biden’s plan is either an act of desperation, a deliberate attempt to pull the rug out from under the U.S. dollar and the economy to jump-start the globalist reset, or a scheme to lock state governments into obedience over pandemic restrictions.
Whatever else Biden’s “New New Deal” is, it is certainly NOT a plan for economic recovery.
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Excellent article. Covid is not going anywhere! They will use this to achieve the global reset. Plus the mind blowing propaganda to get everyone to take the shot.
Like you stated before…the longer it takes to implode the economy the more likely biden gets the blame.
Brandon, what to you think about the covid passport coming? We all know they are going to enforce this shot on everyone! They have stated an employee can be fired for not getting the shot. Imho, this is going to get ugly!
They will try, but they will be unsuccessful in conservative states and counties. Conservatives will go to war before they are forced to accept experimental gen therapy or a medical passport.
Apparently the EU has passed a vaccine requirement mandate.
Just having heard this I cannot elaborate. I don’t see this going well, as there have already been protests against lockdowns.
The new kid on the block is ebola. By the way, there is a vaccine already in place.
Of course there is ??
Great article on a topic so few have a real clue about. It should be obvious that if you’re the one producing goods, then you’re the one with power. As you said, the US had a practical monopoly on the production of goods and was therefore the world leader for a few decades after WWII. We lost that to China, India, Hong Kong, Mexico, etc. over the following decades and thus the loss of jobs, value of the dollar, the ballooning trade deficit, etc.
And the MSM’s propaganda continues strong as they worship their almighty god of spend, spend, spend to infinity when it should be obvious that if you can’t run that scheme in your own household indefinitely before the credit card companies cut you off, then how do you expect the US to do the same when the US’s creditor China can eventually cut us off?
“Biden’s plan is either an act of desperation, a deliberate attempt to pull the rug out from under the U.S. dollar and the economy to jump-start the globalist reset, or a scheme to lock state governments into obedience over pandemic restrictions.”
My best guess is that it’s option #2: the deep state is trying to destroy the US dollar to bring in their CBDC, with option #3 being an added bonus fitting their agenda.
Most Americans won’t believe the economy is crashing unless there is foreclosures and a stock market collapse. Inflation is creeping, and people are noticing but it’s not enough yet. I don’t think Biden is going to be given a bull run however, how long Covid is able to run its course is the real question. After this summer I think we will get a clear picture on when we will get a total bubble burst.
The New Deal was indeed a failure and back then, at least Presidents had enough integrity to admit the errors of their ways. He may have had the right intentions, but the wrong ideas.
Today, collapse and placing all the wealth in the upper levels of society IS their intended plan. The lockdowns were designed to destroy small and mid sized businesses, and shift all spending into a modern day robber baron economy, a monopolistic economy reminiscent of the Rockefeller days. It is working and will continue to work.
The reset is intended to shift all resources into ownership by the elite so we can work to rent the chicken coupes they plan for us to live in. And those living in them will be the vaccinated and somehow survive it. The rest will be buried or incinerated together – those who the vaccine killed and those who are executed for being a vaccinated refusenik.
That is their plan, but we will not allow them to complete it. I have much optimism for the future once the globalists are removed from our society.
That’s pretty much the way I see it!
Roosevelt did not have the right intentions. He was a progressive who wanted power to control others. The history books lie. I am old enough that my father and grandfather lived through the depression. They hated Roosevelt. His programs were causing many people to starve. How did he get re-elected? He was a democrat wasn’t he?
Always a great observation of the broad and realistic circumstances and likelihood’s of modern society. The “insiders” always cycle the economies to buy low and sell high and leave the public holding the bags, this time is no different, maybe just move sophisticated and practiced through the nefarious use of Technologies.
You know what happens to an employee with poor morale who brings down the rest of his/her team with their Debbie Downer attitude? They get canned.
Unfortunately, we can’t do that to fellow Patriots because we need every man, woman, and child we can get on our team. Anyway, I’m glad that at least on this blog, people not only see the agenda, but are actively looking for ways to fight and resist it and have hopefully drawn their lines in the sand and will stick to them whereas, on other blogs, I see a bunch of people who almost seem to relish the “Oh woe is me. We’re all gonna’ die” attitude. People, you’re only going to lose, if you let them win. Understand that and we’ll survive and go on without them.
It’s called a “self-fulfilling prophecy”.
With a dash of Predictive Programming>>>
time and time again
Communism does not work
Socialism does not work
Free Enterprise works
Thank you for your economic clarity. The Great Reset is completely guided by a nihilistic ideology seeking destruction for the sake of destuction. Whichever woke companies or individuals get rich or gain power over the lives of others is secondary to their prime directive and ultimately these useful idiots will be among the first to be lined up against a wall and shot by their fellow leftists. Leftism is a death worshiping cult and the Great Reset is the means to bring about a holocaust.