ause of the fiscal policies, banks could now lend out over $4 billion. The enormous credit expansion sowed the seed for the stock market crash in 1929, the depression, and the New Deal.
             The theory was that an injection of money and easy credit stimulated the economy. In 1927, the Federal Reserve Board further inflated the currency by creating several more billion dollars. People went into debt, and the prices of real estate and stocks skyrocketed. The policies pursued by Coolidge made the later stock market crash inevitable and depression inescapable.
             Credit expansion and inflation artificially reduced the interest rates, thus sending false signals to businessmen. Normally, declining rates would mean an increase in capital savings. Believing this to be the case, businesses increase production, leaving large inventories of unsold items. More money le
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