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veritas1 June 30th, 2013 1:30am

Do you believe FDR's New Deal prolonged the Great Depression?

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PeppyHare Do a barrel roll
06/30/13 8:41 pm

There seems to be a growing popularity around the idea that the new deal prolonged the depression. I think there's a lot of merit to it. We saw a similar failure in the last recession... I think monetary policy makes a bigger difference

suppressedID Anarchist Jurisdiction
06/30/13 2:27 pm

Maybe, but then again we didn't have mass rioting or people starving to death in the streets.
I'll take the controlled landing rather than a Darwinian scenario.

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OhTheIrony Learning from you
06/29/13 8:03 pm

Are you kidding? What self-respecting economist holds this position? Completely ludicrous. The new deal was the stimulus that got America out of the Great Depression.

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veritas1 Panda
06/29/13 8:08 pm

Austrians

beanD California
06/29/13 8:37 pm

Then why did it take 10+ years to get out of the Depression?

veritas1 Panda
06/29/13 8:53 pm

Revitalizing stalled cash flow has always been a huge feat historically. To get the money moving again stakes stimulus because the natural market forces that wild otherwise keep the money flowing no longer exist.

beanD California
06/29/13 9:34 pm

There was a recession right after WW1, and that cleared up in like 2 years under Coolidge's hands-off policies. Yet with FDR, it took 10 years. Admittedly a worse recession initially, but still.

palindrome California
06/29/13 11:32 pm

Bleand- you're talking about a post war recession that saw a HUGE market in a devastated Europe. Europe couldn't produce much in the immediate aftermath of that war.

Vincere Seattle
06/30/13 12:31 am

@beand, Completely different scenarios there. Through the 1920s, 70 banks failed per year on average. In the first 10 months of the depression, 744 banks failed (including some big ones). Over 9,000 failed over the course of the decade.

PeppyHare Do a barrel roll
06/30/13 8:48 pm

Great Depression monetary policy was horrendous and wrecked the entire financial system. Thats why it differed from any other recession.

Fiscal policy doesn't actually do a whole lot economically. Maybe improves confidence but its a farce.

wadenx requires your response...
06/29/13 8:02 pm

No, what prolonged the recession was battered and scared consumers. Instead of spending they hoarded.

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wadenx requires your response...
06/29/13 8:02 pm

I meant depression.

beanD California
06/29/13 8:37 pm

That, and poor use of govt money.

rk1222 Gone so soon
06/29/13 7:47 pm

Looking at economic graphs, you'll find that the New Deal initially helped then started to go into a Double Dip Recession when the country was flung into war. War pulled us out of the Depression by creating innumerable jobs.

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beanD California
06/29/13 8:39 pm

The goal of an economy really isn't jobs, so the sign of a flourishing economy isn't technically found in the unemployment rate.

rk1222 Gone so soon
06/30/13 4:21 am

I agree; however, by creating jobs more money is circulated and people chose to buy more than just the necessities which is a sign of a good economy. So, though, unemployment does not necessarily determine the economy it is a major factor.

steelcity Pittsburgh
06/29/13 7:02 pm

You can tell what's taught in schools that's for sure.

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skinner Wisconsin
06/29/13 6:59 pm

It definitely didn't prolong it, Keynesian Economics wasn't working too well, the economy had its ups and downs, but it eventually recovered to a mediocre degree. It took WWII to actually restore our economy.

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veritas1 Panda
06/29/13 7:01 pm

It's hard to get more Keynsian than wartime government spending.

skinner Wisconsin
06/30/13 4:42 am

WWII Agave the economy the energy and motivation it needed.

veritas1 Panda
06/30/13 4:19 pm

No. The war spending did that. The fact that the labor force is being killed itself only harms the economy.

skinner Wisconsin
07/02/13 1:54 pm

Not really considering unemployment was high.

DerekWills Lone Star Gun Rights
06/29/13 6:54 pm

Wow... No one is apparently educated on this subject... Do some research people! This isn't a matter of opinion.

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skinner Wisconsin
06/29/13 6:58 pm

Well, technically everything in economic is just a bunch of opinions, but there is evidence to support that the New Deal helped.

Vincere Seattle
06/29/13 6:52 pm

It helped, but was too late to have a big impact. It took World War level spending to really get us out of that one.

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Marley17 or is it just me...
06/29/13 6:48 pm

No. It supplied jobs and aid to people. Studies show that it did help. WWII helped end the Depression though, but war is usually what stables a country's economy.

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beanD California
06/29/13 8:40 pm

So why is everyone mad about the war in Iraq? Why are we so anxious to get help, if war stimulates our economy?

beanD California
06/29/13 10:21 pm

Sorry, get OUT, not get help.

Marley17 or is it just me...
06/30/13 6:30 am

Because people are dieing. Is a human life less valuable than our economy? And some people don't know why we are at war, and just assume its not for a good enough reason.

DrReid Ever present.
06/30/13 11:18 am

The Iraq war was not big enough to help. In WW2 the entire country went to war, Iraq was just solders.

bMyComrade Stumptown
06/30/13 3:54 pm

DrReid nailed it. It wasn't the act of war, it was the economic restructuring and massive employment brought about by the wartime production boom.

chrismisen atlanta
06/29/13 6:47 pm

it did some good and bad, so i went with no

zman117 Ohio
06/29/13 6:38 pm

I'll keep it short........ No

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veritas1 Panda
06/29/13 6:43 pm

I don't know. It's a popular opinion among people right-wing economy about government stimulus plans in general.

PeppyHare Do a barrel roll
06/30/13 8:55 pm

The idea is that government deficit spending crowds out private investment and is spent inefficiently. In short... Spending money to spend money doesn't work, it's what it is spent on that matters.