Thayer, Frederick C, bonehead author

Thayer, Frederick C., The American Journal of Economics and Sociology:

"... since 1791, there have been six significant economic depressions among the innumerable "business cycles." Each sustained period of budget-balancing was immediately followed by a significant depression. There are as yet no exceptions to this historical pattern.

Here is his hose manure. I correct his errors below the quote, so please read on.

This is the record of six depressions:

1. 1817-21: in five years, the national debt was reduced by 29 percent, to $90 million. A depression began in 1819.

2. 1823-36: in 14 years, the debt was reduced by 99.7 percent, to $38,000. A depression began in 1837.

3. 1852-57: in six years, the debt was reduced by 59 percent, to $28.7 million. A depression began in 1857.

4. 1867-73: in seven years, the debt was reduced by 27 percent, to $2.2 billion. A depression began in 1873.

5. 1880-93: in 14 years, the debt was reduced by 57 percent, to $1 billion. A depression began in 1893.

6. 1920-30: in 11 years, the debt was reduced by 36 percent, to $16.2 billion. A depression began in 1929.
...

The question is whether this consistent pattern of balance the budget-reduce the national debt-have a big depression is anything other than a set of coincidences. According to economic myths, none of these sequences should have occurred at all. How on earth, for example, could we virtually wipe out the national debt in the mid-1830s, then fall immediately into one of the six recognized collapses in our history? ..."

At each of the authors list I give the results, everytime a new monetary regime for the US, or Civil War:


1812 first depression fallowed by the second bank of the United states, new monetary regime.
1836, second depression followed by elimination of second bank by Jackson, new monetary regime.
1857 third depression followed by civil war.
Fourth depression, 1873 followed by Coinage Act, new monetary regime.
Fifth depression, 1893 led to free silver movement, failed attempt at new monetary regime.
1930, Roosevelt and new monetary regime.
1972 Nixon Shock new monetary regime.
Yes indeed, we do new monetary regimes whenever voters get tired of paying for the interest costs in the old. So lets default like we always do, but do it with knowledge about how monetary systems really work.