News Release
September 27, 2013

The Terrible 10: A Century of Economic Folly
New Independent Institute book charts nation’s worst economic blunders – and how to avoid them in future

September 27, 2013 Oakland, CA – 2013 is the 100th anniversary of the income tax and the Federal Reserve Act but American taxpayers should not be celebrating, according to The Terrible 10: A Century of Economic Folly, a new book from the Independent Institute.  

“American taxpayers are victims of a century of disastrous government policies that cost trillions of dollars in wasted resources, created mass unemployment, and kept millions of people in poverty who otherwise would have participated in the nation’s growing prosperity,” said author Burton A. Abrams, a Research Fellow at the Independent Institute, Director of the Institute's Government Cost Calculator (, and Professor of Economics at the University of Delaware.

The Terrible 10 charts the blunders chronologically, beginning with Prohibition, “a massive, precedent-setting governmental intervention in personal freedom,” that wasted resources, aided criminals and corrupted public officials and ordinary citizens alike.  Joining this “miserable failure” was monetary policy during the Great Depression.

The Federal Reserve was created to prevent the widespread runs on banks that plagued the U.S. economy. But the biggest banking panic in U.S. history was in the making, and “the Fed’s failure to act decisively was one of the most costly economic policy errors in the past 100 years.”

The Republican-sponsored Hawley-Smoot Act, signed over the objections of more than 1,000 economists, touched off a trade war and helped set the stage for World War II. President Ronald Reagan called Hawley-Smoot “the most destructive trade bill in history.”

The Terrible 10 portrays Social Security as “the second largest Ponzi-type scheme sponsored by the U.S. government,” a “non-transparent welfare program that redistributes enormous amounts of wealth, often in ways that most Americans would find undesirable.”

The income tax has become “excessively complicated, non-transparent, and costly” and “hides more than a trillion dollars in hidden subsidies that distort economic decision-making and produce economic waste.”

According to The Terrible 10, Medicare isthe single worst Ponzi-type scheme in the government’s arsenal” and “$20 trillion to $30 trillion dollars in the red and in far worse shape than Social Security.”

Abrams shows how Republican president Richard Nixon pressured Federal Reserve Chairman Arthur Burns to overheat the U.S. economy prior to Nixon’s reelection bid. This launched the Nixon-Burns Political Business Cycle, “a decade of inflation that required three recessions to extinguish.”

Nixon also created the Environmental Protection Agency and now, says Abrams, “Wasteful environmental regulations are the rule, not the exception, and usually they benefit special-interest groups while harming society at large.”

Paternalistic policies by Democrats and Republicans fostered the Great Real Estate Bubble, followed by Government Failure and the Great Recession. “The economic damage to the young and less fortunate added another cruel dimension to the economic catastrophe.”

Abrams notes the rapid and unprecedented peacetime run-up in the nation’s public debt that threatens to sink the economy. So irresponsible deficit spending, is a major part of the problem. But the author also provides key lessons to help the nation avoid repeating such policy mistakes in the future.

“Government decision-makers, regardless of political party, tend to favor short-run benefits for friends while imposing costs on current and later generations,” said Abrams. If national leaders want to steer a course toward prosperity and economic growth for the next 100 years, they need to avoid these destructive tactics:

(1) caving in to special-interest groups; (2) treating adult citizens like the government’s children; (3) allowing electoral majorities to take advantage of the rest of society; (4) obsessing about the short run – what Abrams calls immediosis; (5) choosing to stay ignorant about the deeper ramifications of government policies; and (6) rationalizing bad policies on the grounds of their “plausible acceptability.

To arrange an interview with the author of The Terrible Ten: A Century of Economic Folly, please contact Robert Ade at 202-725-7722, 510-632-1366, ext. 114, or

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The Independent Institute is a non-profit, non-partisan, scholarly research and educational organization that sponsors in-depth studies of critical social and economic issues. For more information, visit