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Treaty of Versailles

How did the Treaty of Versailles contribute to the depression?

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2006-10-03 03:27:00
2006-10-03 03:27:00

No - not a bit. Unrelated event. The depression was caused by a variety of factors but mainly by poor economic policies. Among these being: high taxes (very high marginal rates in the USA and other nations that reduced capital formation), protectionist trade legislation (this vicious beast continuously has to be beaten back as it is promoted constantly by 'compasionate' types, liberals, and unions), weather problems (drought, flood - of unual intensity) and collapse of various strong currency valuations (mainly German but also prevalent in many other nations such as Hungary and other small nations). None of these problems were directly a result of the treaty although its extremely harsh terms against Germany have often been stated as reasons for the depression of 1929 - 1939. For example, to help eliminate the debt from the war, the German government of the 1920's debased the currency, causing a hyper inflation. This of course made all debt worthless, but also wiped out savings and capital, causing a major economic calamity. The USA came up with the wonderful idea of high tarrifs and high income tax rates - brilliant economic policies that by themselves may have triggered the USA depression....and as mentioned above are still high on the list of favorable economic policies by liberals and other economic morons.

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