Did cutting taxes and paying off the national debt cause the Great Depression?

[minionofmidas]

I don't know if anyone can positively identify the cause of the great depression, but in my opinion Richius is on the right track. The Fed's easy money policy caused the run up in the stock market. Later they tightened the money supply which perhaps caused the market to crash. That caused a bank run which in turn resulted in bank failures nationwide.
The Smoot Hawley tariff was passed in June of 1930, but the market crashed in September of 1929, so it could not have caused the crash. It may have made things worse though. High top tax rates didn't help either.

Uh...they didn't exist yet.

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Well, the Fed's original setup was very much faulty - basically bankers were free to make decisions they felt were good for themselves privately. The setup has changed beyond recognition since - not that I think the Fed's done a good job in the 90s.

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[minionofmidas]

Yes, if you want to put it very pointedly, the Great Depression was caused by cutting taxes and paying off the national debt - by doing so at the expense of your trading partners.
The Depression was in full swing well before the Stock Market Crash - farm incomes were declining, in real terms, all through the 1920s, and America was still a very agrarian country in 1920.
In fact, I believe Stock Market Bubbles are a crisis symptom. People won't invest like mad in stocks they hardly know anything about if there are sounder investment options nearer at hand.

[minionofmidas]

Yes, if you want to put it very pointedly, the Great Depression was caused by cutting taxes and paying off the national debt - by doing so at the expense of your trading partners.
The Depression was in full swing well before the Stock Market Crash - farm incomes were declining, in real terms, all through the 1920s, and America was still a very agrarian country in 1920.
In fact, I believe Stock Market Bubbles are a crisis symptom. People won't invest like mad in stocks they hardly know anything about if there are sounder investment options nearer at hand.

Stock market bubbles are a symptom of artificially inflating the money supply.
http://www.mackinac.org/article.asp?ID=4026

They're also a way to artificially inflate the money supply...the question then would be: In what circumstances is the money supply artificially inflated? And how had we previously defined "artificial" again?
Might it have something to do with "creating an imbalance"? (This one, unless the ones above, is not a rhetorical question, btw.)
If so, isn't that really the same as a crisis symptom, since it means markets won't function "properly"?