[PeterPrinciple]

The dominant theory at the time was that the Great Depression was caused by “underconsumptionism.”

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[conservatism_IS_compassion]

The dominant theory at the time was that the Great Depression was caused by “underconsumptionism.”

This is directly contrary to Say’s Law, which states that supply creates its own demand - that the cost of producing a product is money in the hands of people, adequate to buy the product.

That assumes, of course, that the product in question is not buggy whips which no one wants, the cost of production of which will bankrupt the producer. Unless of course the producer is the government, in which case the “bankruptcy” takes the form of decline in the credit-worthiness of the government, thus a decline in the value of the government’s paper. And since “government paper" includes paper dollars, the result is inflation - decline in purchasing power of the dollar.