Since Woodrow Wilson assumed the presidency in 1913, there has been a systematic effort to fundamentally transform America. His prejudice and hostility against the U.S. Constitution and the free enterprise capitalistic system resulted in a greatly expanded federal government and increased taxation. The federal income tax and the Federal Reserve were thus created. However, by 1920 unemployment had increased from 4 percent to 12 percent, GNP had plunged 17 percent and the nation was gripped in a depression.
The 1920 presidential election had Warren Harding winning over James M. Cox. Harding, in early 1921, slashed federal taxes across the board against the advice of his commerce secretary, Herbert Hoover, and the political elite. However, the results were almost immediate, by mid-1921 recovery was in progress and by 1923 unemployment had dropped from 12 percent to 2.4 percent, with a drop in the national debt of over 30 percent, which ushered in an era of unprecedented prosperity called the Roaring Twenties.
However, we have been conditioned that free market capitalism is to be held with suspicion and disdain and that it is the federal government that should be the driver of the economy. Theory and reality are often divergent as we have seen historically as we as currently. Federal government economic stimulus creates enormous debt without corresponding benefit. But, it is excessive business taxation and the stifling regulatory burden that holds back economic progress. Lower that burden and slash taxes and the economy will leap forward and virtually everyone will benefit. Question is, do we have the political will to do what will really benefit the country as a whole or would we still prefer the status quo? We, the people, will later provide the answer.