Our current US government, every branch, is a collection of fools and knaves. The latest budget deal just about guarantees a repeat of the 1937 recession, for exactly the same reason.

They already sliced $5 Billion out of food stamps, and now they are going to let the extended unemployment benefits expire at the end of the year, both of which have/will reduce demand, and cause more unemployment.

This deal requires Federal workers and the military to pay more into their retirement accounts, effectively cutting their pay, and providing another decrease in overall demand.

The basic problem is a lack of demand for products and services, and the government is acting to reduce it even further.

While I’m covering the ignorance of the government I would like to point out the origin of the social safety net. It did not arise from the socialist movement, it came from the military-industrial complex in the late 19^th century, pushed primarily by Otto Fürst von Bismarck-Schönhausen, Chancellor of the German Reich.

The Iron law of wages asserts that real wages always tend, in the long run, toward the minimum wage necessary to sustain the life of the worker. While trying to determine that level it has a tendency to spend more time below than above that level, like the Federal minimum wage. Otto discovered he couldn’t field a decent parade, much less a respectable army from the German workers, as only about 1 in 10 was in good enough shape to turn into cannon fodder. He got health care and later unemployment insurance enacted so he could go to war if necessary. The British government picked up the concept for the same reason.

The socialists adopted the concepts, but they arose from national security concerns, not ‘bleeding-heart liberals’. If we attempted to institute the draft again in the US, we would be faced with the same situation as Otto.