With the politicos arguing what should, and should not, be in the inevitable stimulus bill, the American people are probably scratching their heads en masse and wondering why these politicians have not learned the lessons of the Panic of 1819.

Well, that’s probably incorrect.  The fact is that most Americans have never even heard of the Panic of 1819.

How can it be that what economist Murray Rothbard referred to as “America’s first great economic crisis” can be so unheard of among the American people?  The answer is simple.  The economic downturn that began in 1819 was short-lived as government chose not to intervene.

President Monroe, in opposition to the counsel of many of his advisers, resisted the temptation to try to artificially correct the recession.  The crisis ran its course and the economy began bouncing back in about two years.

Economists of the Austrian school were the ones to predict the current economic crisis but our leaders are relying on those of the Keynesian school to learn from their mistakes and pull us out of it.

To discuss this issue further head over to the Austrian Economics or Stop the Government “Bailouts” groups on Bureaucrash Social and start a blog or comment on dozens of discussions and blog posts dealing with the stimulus package.  For more information on free market solutions and how individuals would be better served if the government would just get out of the way, be sure to read the Progressives Against Progress and Enjoy Capitalism Intel overviews.