Immigration prior to 1924 was not “unrestricted”. It was generally restricted to white people. The 1924 act restricted it more, tilted against people from southern and eastern Europe.
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Not quite. What I said was “…prior to about 1924, the US had largely unrestricted immigration that created a young and ambitious work force.”
The key is the size of the work force relative to the nonworking population. I am a great believer in demographics. Prior to the 1920s the US had mostly unrestricted migration (at last from Europe), which maintained a working population that allowed for consistent GDP growth until the Draconian immigration restrictions of the 1920s.
As seen in the graph, the “Roaring 20s” was not so roaring (compared to past performance) on a per capita basis. That tells you the importance of workers to GDP…the 1920s economy grew as the working population grew. Cut off the supply of foreign-born workers as was done in 1924 and you get the 1930s.
The 1950s had two different worker inputs that obviated the need for immigration. The first was the rise in women workers.
The second was the sharp increase in African-American skilled labor:
In comparison, for the foreseeable future the only increase in the US workforce will come from immigration. Therefore, our 2024 situation is more similar to 1924 than the 1950s. Worse probably since our domestic birth rate is much lower than a hundred years ago.
It was not that simple. There were no proper financial analytics. People gambled only. Gamblers do not admit their losses but free tout their wins.
The average inflation rate in the United States in the 1920s was volatile, with sharp inflation and deflation:
- 1920: 15.6% inflation
- 1921 -10.9% inflation
- 1922 -6.2% inflation
- 1923: 1.8% inflation
The inflation rate in the United States from 1914 to 2024 averaged 3.30%.
There was a lot of inflation during WWI. SecNav Daniels hated cost plus contracts, but the cost of labor and material escalated so rapidly after the start of the war, the only way he could get ships under contract, was on a cost plus basis. Then there was a recession shortly after the end of the war. Then the drag of the flu epidemic.
Once past all that drama, the government was rolling in money, annual budget surpluses of 20-25% They must have wanted to pay off the Liberty Bonds in a hurry.
Steve
No time to look it up but the US never pays off the debt in a hurry. Why ruin a good thing?
Not fer nuthin’, but Warren Buffett is amassing cash, and selling positions which are quite richly valued in spite of his hatred of doing so because of the tax implications.
So he’s willing to take a 20% (plus or minus) haircut to get out of some of his biggest gainers.
Make of that what you will.
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Oh, ye of little faith.
According to a graph at the link, total us Federal debt in:
1920 $26B
1921 $24B
1922 $23B
1923 $22B
1924 $21B
1925 $21B
1926 $20B
1927 $19B
1928 $18B
1929 $17B
1930 $16B
Steve
No wonder we had the Great Depression. There was no capital in the markets.
The Federal Reserve wasn’t acting counter-cyclically. As the economy contracted the idea at the time was that less money was needed.
DB2
