The Great depression was reversed by War.
The Recession that began with LBJ was caused by excessive governmental borrowing That crowded out capital for private investment and spurred inflation.
The Nixon recession was not reversed by wage and price controls or spending and became more inflationary under Gerald Ford.
The Ford recession was not reversed by his Whip Inflation Now policies which did not respond to targeted spending and voluntary prce controls.
The Carter Recession turned into stagflation after a spending spree.
The Reagan recession was reversed with spending cuts, restrictive monetary policy and major tax cuts.
The George H.W. Bush recession was created by tax increases and increased spending.
The Clinton recession was created by a stock market bubble and reversed by Bush tax cuts.
The Bush recession was created by runaway spending and the bursting of the housing bubble.
WHERE IN AMERICAN HISTORY CAN WE FIND AN EXAMPLE OF SPENDING OUR WAY OUT OF A RECESSION INTO PROSPERITY? IS THIS SOME KIND OF KEYNSIAN WISHFUL THINKING?
Tribeca,
The WWII spending was significantly financed by lend-lease which actually had foreigners buying our products and then followed by a period reconstruction where we also exported an extraordinary amount of goods and services. It was not domestic spending that reversed the Great Depression. FDR Treasury Secretary Henry Morganthau is famously quoted as saying that the New Deal spending was not working and that he feared there would not be enough money in the world to make it work.
I don’t care who you blame for the stock bubble or the housing bubble. There is plenty of blame to go around. The question now is how to get out or at least not make it worse.
For the record, Krugman is not even a trained economist for the record and his Nobel Prize was largely motivated by the politics of a world that was angry at Bush. Of the economists know and read (including the Magazine "The Economist"), most of them do not take Krugman seriously.
Good Guy,
You need to read a different book. Seriously, read a biography on Morganthau and how tortured he was that what should have been working was failing and that he was at a loss to explain it and fearful that credit to the US might dry up for the continuation of the "experiment".
Matticus,
Check Bureau of Economic Statistics for 3rd and 4th Quarter 2000. You will find it there. Get back to me if you don’t. I checked it this morning before I wrote the question. It will be in the column "revised".
Matticus Part II,
Wars open markets, train men, create pent up demand for consumables do to war effort shortages and leave in the wak of their destruction economic opportunities inhe form of literallly and metaphorically rebuilding countries who were devastated by War. I am recommending war to rebuild our economy, just explaining to you what I was taught in Economic History at Stanford University. So far as I know, this is still the common view of economy and war.
Tribeca,
You’re right about Krugman he does have a PHD in economics. I stand corrected.
yeah and they would spend more if they could….just more goverment jobs created
no
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No. It is simply not possible to borrow your way out of debt.
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World War II involved massive amounts of government spending, so you undermine your own premise about the Great Depression.
Unlike some conservatives, however, I believe that the New Deal legislation and spending ended the Great Depression in 1937 so that is actually the best and most dramatic example.
The Bush tax cuts, increased spending on unnecessary war, deregulation, lack of regulation of the mortgage industry, lack of oversight over businesses that ran amok with "creative" financial schemes, Bush’s "ownership society," etc., all helped contribute to our current dire economic situation.
Leading economists, including ones who predicted this economic downturn because the economy was based on fantasy rather than on a strong basis, recommend large amounts of government spending in order to jolt the economy. Some economists like Krugman think that we are not spending enough.
Edit: Contrary to your assertion, our allies to whom we were supplying materials under Lend Lease were busy fighting a war and didn’t have any money to pay us back at the time. That was one of the major objections to FDR’s plan by his critics.
Your criticisms of Krugman are ridiculous. He is a professor of economics at Princeton. He has also taught at the London School of Economics. He has a Bachelor’s degree in Economics from Yale and a Ph.D. in Economics from MIT. Look up his bio.
If you don’t want to honestly face the reasons as to why we are in this economic mess to begin with, you will be one of those conservative advocates who helps get us into a similar mess again in the future.
References :
http://www.centennialofflight.gov/essay/Dictionary/Lend_lease/DI117.htm
You have done your home work
The majority of this stimulus package is paying off political patronage
both Democrat and Republican
I think both sides stink when it comes to being selfish with our money
The recession will run into a depression before the recovery cycle
will kick in~~and worst part is the desert wars are going to go on
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yeah and they would spend more if they could….just more goverment jobs created
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you say recession, many say "heading toward depression" and if you think WWII pulled us out of the depression, you have been listening to the wrong limbaws/mcconnells…read an economic/ history book and you will see the nation was well on it’s way out of the recession before WWII, although, yes, the war effort certainly helped. Look at government spending by FDR and then look what happened in ’36/’37 when government spending was cut in an attempt to balance the budget–wham, back into a downward spiral, until spending (by gov’t) began again in ’38, whereby the economy immediately improved again. Yeah, by ’42 america was out of the depression and the war sealed the deal. So there is your example of what you wanted, but my guess is you will belittle FDR’s effort and ignore history, which is pretty much what the right does consistently–and you wonder why your party now has the approval rating on the par of those like, oh, say, michael vick, or bernie madoff…
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We didn’t have a recession during the Clinton years. Most of what you just said is based from opinion, and little to no facts.
During the Clinton years our country had a iron grip economy, and we were in a surplus.
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Wars don’t reverse recessions either, that’s just standard textbook catch lines Republicans like to use. Wars cost money. Lots of money. How can a war make money? Only way a war can do that is if we conquered another nation.
We’re not borrowing our way out of debt. The government is giving our economy a "Shock therapy". The stimulus will flood all this money in to it creating jobs, and more tax payers obviously.
So more people will consume, and more people will pay taxes. Really, the stimulus bill isn’t as big as people think because a good portion of that will go back to our treasury.
I guess people also don’t think that we’ve never had a stimulus like this in our history, so we don’t know what it may do.
This assumes that the spending actually was "stimulus" when it isn’t even that- it’s just trillions of dollars on pet projects such millions spent on building a museum to honor Ted Chappaquidick Kennedy for staying in office for years after murdering a girl and getting away with it.
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