Seven Politically Driven Economic Catastrophic Years

Introduction

Economic history is marked by significant events that have shaped the financial landscape of nations. The interplay between politics and economics often leads to critical turning points, some of which have catastrophic consequences. In this article, we'll explore seven politically driven economic catastrophic years in the United States that have left a lasting impact on the nation's financial system and its people.

1. The Creation of the Wage Tax - 1909:

The year 1909 saw the United States government take a significant step in altering the financial landscape. The 16th Amendment to the Constitution allowed the government to levy income taxes. This marked the beginning of a new era in which the federal government would play a more substantial role in individuals' and corporations' financial affairs. The wage tax introduced in 1909 became a pivotal point in American economic history, shaping the way citizens paid their dues to the government.

2. The Federal Reserve Act Passes Congress - 1913:

In 1913, the Federal Reserve Act was signed into law, establishing the Federal Reserve System. The intention was to stabilize the financial system, but it also concentrated power in the hands of a select few. While the Federal Reserve has played a crucial role in managing monetary policy, it has also been criticized for its role in perpetuating economic inequality and fostering a culture of financial speculation.

3. Outlaw of Private Possession of Gold - 1934:

The Great Depression prompted the government to take extraordinary measures, including the prohibition of private possession of gold in 1934. This move was intended to stabilize the U.S. dollar and encourage people to trust the currency. However, it significantly eroded individuals' financial freedoms and marked a departure from the gold standard, fundamentally altering the nation's economic foundations.

4. No More Dollars for Gold - 1971:

President Richard Nixon's decision to suspend the convertibility of the U.S. dollar into gold in 1971 marked the end of the Bretton Woods system. This decision, known as the "Nixon Shock," had global implications, including currency fluctuations and the eventual shift towards a fiat currency system. The catastrophic outcome was a loss of financial stability and the beginning of unprecedented inflation.

5. Weakening Standards for Mortgage Bonds - 1993:

In the early 1990s, the U.S. government took steps to encourage homeownership by weakening the standards for mortgage bonds. While this initially increased the number of homeowners, it contributed to the eventual collapse of the housing market in 2008. The subprime mortgage crisis was a painful reminder of how politically driven decisions can lead to economic catastrophe.

6. Restart of the War-Bond Industrial Complex - 2001:

The events of September 11, 2001, led to a renewed focus on the military-industrial complex. The War on Terror prompted significant increases in defense spending, which had economic implications. The diversion of resources towards military endeavors strained the national budget, contributing to the fiscal challenges faced by the United States in the years that followed.

7. World Economic Decline and Mortgage Bond Collapse - 2008:

The year 2008 was perhaps the most catastrophic in recent memory. The global financial crisis, triggered by the collapse of mortgage-backed securities, brought the world to the brink of a second Great Depression. The aftermath included bank bailouts, housing market crashes, and widespread unemployment.

Conclusion

These seven politically driven economic catastrophic years have had profound and lasting effects on the United States' financial landscape. They serve as a reminder of the complex interplay between politics and economics, highlighting the importance of thoughtful and well-informed decision-making in safeguarding the nation's economic stability and the well-being of its citizens.