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
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.
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.
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.
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.
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.
@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.
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.
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.
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.
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.
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.
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.
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