WELCOME BACK, CARTER: America Tried the Biden Recovery Plan in the 1970s—It Was a Disaster.

Fed by those new taxes and deficits, spending rose across the board. Billions went to city-scale housing projects and urban development, with mass public transit cutting swathes across urban moonscapes. The nation’s railroads were bailed out, with passenger lines nationalized as government-owned Amtrak. Millions of new welfare recipients were created, social security beneficiaries massively expanded, and Washington was abuzz with talk of a “guaranteed annual income” mirroring today’s universal basic income.

Meanwhile, on the other end of the income distribution, crony payments went out to influential lobbyists; $1 billion for the supersonic transport (SST) Boeing 2707 boondoggle that supposedly would compete with the doomed Concorde, then an outright $700 million grant to keep contractor Lockheed in business. The Chrysler Corporation, once a crown jewel of the American economy, received $1.5 billion in taxpayer loan guarantees. Influential Senator Jacob Javits (R–NY) proposed bailing out any company that suffered losses at all.

The second ingredient that created the economic crisis was the explosion of the regulatory state. President Nixon, with the support of Congress, created entire regulatory agencies, including the Environmental Protection Agency. Regulatory budgets at the federal level went from $6.8 billion in 1967 to nearly $20 billion (adjusted for inflation) by 1980—nearly tripling in just 12 years. Over that period, the number of regulatory staff grew from 78,000 to nearly 150,000 bureaucrats, a veritable army dedicated to handicapping the American economy.

Earlier: What Happened in 1971? Edward Snowden and Jack Dorsey Want to Know.