FDR and his policies prolonged the Great Depression by 7 years

Yet another failed experiment in Keynesian economics is crashing right before your eyes. More worthless redistribution than ever. More transfer payments than at any time in the history of the world. Completely wasted.

<<<Mod Edit: Insult removed.>>>

 

Stick to the topic and not the poster.

 

Right....

The validity Keynesian stimulus policy is very well supported by evidence. The problem is our economic policy is largely dictated by politicians, not economists, and our politicians are often short-sighted morons who worry only about reelection. So Keynesian stimulus becomes much more difficult, if not impossible, if the second part of the equation is not taken into account, the equation being this. Keynes would say that you balance the budget over the business cycle, you increase spending and lower taxes in a recession and recovery, and you raise taxes and reduce spending during times of prosperity!! If you do not do the second, it makes it much more difficult to justify spending your way out of recession. Well our politicians since Reagan have spent like drunken sailors(with the exception of Clinton) during both recession and prosperity. You need both parts of that equation to make it work. You need spending increases and tax cuts in recession, and spending cuts and tax increases when there is prosperity. Political partisanship makes that almost impossible, even if it is sound economic policy.

 

frodly, this is a very good review of why we are in the economic slump we are in today. I especially like your following comments.

"Keynes would say that you balance the budget over the business cycle, you increase spending and lower taxes in a recession and recovery, and you raise taxes and reduce spending during times of prosperity!! If you do not do the second, it makes it much more difficult to justify spending your way out of recession.

Obama has admitted none of the stimulus money went to "shovel ready" projects. Shovel ready projects put many people back to work. Most of the stimulus money went to bail the big banks, the auto makers and grow the size of the federal government.

The bank bailouts and expanding the size and power of the federal government were both big mistakes.

A policy of increasing employment in the public sector produces an endless spiral which then leads to a significant increase in our national unemployment rate.

Also, what most people don't realize is, for every Government job that is "created" the private sector must create at least NINE jobs to pay for it.

Here is how the math works. Taxes from each private sector worker go to pay at most 11% of the Government worker's salary and benefits. Therefore, it will take NINE private sector workers (100% divided by 11%) to pay for the salary and benefits of each NEW government worker.

The solution to this problem is obvious; we need to employ as few government workers as is economically and reasonably possible.

 

You are very correct, Revere.

Obama has admitted none of the stimulus money went to "shovel ready" projects. Shovel ready projects put many people back to work. Most of the stimulus money went to bail the big banks, the auto makers and grow the size of the federal government.

The bank bailouts and expanding the size and power of the federal government were both big mistakes.

The economy will not begin to grow again until our U.S. small business owners know with certainty what their new costs will be under Obamacare and that no more government rules and regulations that discourage business expansion and raise the cost of doing business are on the horizon.

 

What about 1934? +10.9% That is a continuing decline in your view, right?

What about 1935? +8.9% That is a continuing decline in your view, right?

What about 1936? +13.1% That is a continuing decline in your view, right?

What about 1937? +5.1% That is a continuing decline in your view, right?

The economy grew every year in those years by at least 5%, in some years more than 10%.

But I guess to you that constitutes a continuing decline because it fits your agenda.

No need to be honest about it, right?

 

When was it disproven? I missed that.

An increase in spending was instrumental in both the Great depression and the current one. Reagan also dramatically increased spending in the '82 recession.

 

Depends on how you define recession. I appreciate you like to pretend there was no change after FDR implemented his new deal because it supports Keyensian theory.

But even you, if you have a shred of honesty, have to admit the economy started growing in 1933-34.

I made no assertion that was your claim and therefore put no words in your mouth. I am stating a relevant fact.

Wiki defines it as a downturn. In 1934 the economy was not going down but up.

Of course. After a severe recession it takes time to fix the damage. The housing market will be decimated for years.

Year - % chng GDP
1930 -8.6%
1931 -6.5%
1932 -13.1%
1933 -1.3% <- FDR takes office
1934 +10.9%
1935 +8.9%
1936 +13.1%
1937 +5.1%
1938 -3.4%
1939 +8.1%
1940 +8.8%

The data contradicts your statement and your argument on Keyensian economics. Sorry.

 

What was their position on the findings that unemployment figures in the GD were exaggerated because Govt employment was not counted?

 

Look at that spike in the 1940s.

Now that is what you call stimulus.

Which you have agreed fully recovered the economy from the recession.

Keyensian vindicated again.

 

The war gave the economy the Keyensian spending boost that was needed. Taxes were increased, spending shot up, and the Govt hired millions more workers and fully recovered the economy.

After WWII, top tax rates were 91%, millions Americans got their educations and health care for free and home loan subsidies with the GI bill.

In other words, what conservatives would call today outright socialism.

But that Socialist America kicked ass. The economy grew robustly and they paid down the WWII debt from 120% of GDP, higher than it is today, to just 32% until the "Reagan revolution" reversed the trend and started us on the path we are at today.

The so-called Tea Party "patriots" that want to see our country destroyed should look to the greatest generation if they want to see how "real Americans" (as they call them) did it.

 

You are kidding, right?

This spike had nothing to do with Keyensian economics.

It had everything to do with the war effort in the 1940s.

Here is a good review of the principles of Keyensian economics.

Obama has admitted none of the stimulus money went to "shovel ready" projects. Shovel ready projects put many people back to work. Most of the stimulus money went to bail the big banks, the auto makers and grow the size of the federal government.

The bank bailouts and expanding the size and power of the federal government were both big mistakes.

A policy of increasing employment in the public sector produces an endless spiral which then leads to a significant increase in our national unemployment rate.

The economy will not begin to grow again until our U.S. small business owners know with certainty what their new costs will be under Obamacare and that no mor government rules and regulations that discourage business expansion and raise the cost of doing business are on the horizon.

Also, what most people don't realize is, for every Government job that is "created" the private sector must create at least NINE jobs to pay for it.

Here is how the math works. Taxes from each private sector worker go to pay at most 11% of the Government worker's salary and benefits. Therefore, it will take NINE private sector workers (100% divided by 11%) to pay for the salary and benefits of each NEW government worker.

The solution to this problem is obvious; we need to employ as few government workers as is economically and reasonably possible.

 

Year - % chng GDP
1933 -1.3%
1934 +10.9%
1935 +8.9%
1936 +13.1%
1937 +5.1%
1938 -3.4%
1939 +8.1%
1940 +8.8%

Only a true partisan could call that a "rotten economy"

 

Massive government spending, big tax increases, millions on the Govt payroll.

How is that not stimulus spending?

 

far be it from me to defend Stalin! You are correct about Stalin's murderous policies which dated back to the mid 20's. It is estimated that Stalin murdered over 8 million people in what today are the Baltic Republics, Belorus,Ukraine, Kazakhstan, and Poland between the mid 20's and late 40's. Additionally, Stalin in the guise of national security and fighting counter-revolutionaries engaged in ethnic cleansing. Most of the citizens of the USSR which Stalin murdered were not Russians, but other ethnic groups.

 

We have some good friends who emigrated here from the Ukraine.

They are both well educated.

The people in the Ukraine opposed Stalin’s policies and he had many of them put to death.

Many Russians hate Stalin and communism with a passion.

I wish some of the misguided liberals in this group could talk to them!

 

millions of ethnic Ukrainians, ethnic Poles, and ethnic Jews were deliberately starved to death in the Ukraine, and Belorus during the 1920's and 30's. historians refer to this genocide as the "holodomor".

 

That spending wasn't what recovered the economy. The economy only truely began to recover after that spending stopped, and absent the demand for our goods from the rest of the world the depression probably would have continued.

Do you have a breakdown of how much of your GDP figures there are the result of government instead of private sector spending?

 

These are excellent comments, Roon.

The liberals in this group love to dance around the issue.

Just because Government spending went up as a percentage of GDP, they incorrectly assume this is the &#8220;equivalent&#8221; of an economic recovery.

Nothing could be further from the truth.

They refuse to look at private sector GDP growth from 1932-1946 because these data will not support the conclusions they are desperately looking for.

"By 1939 the U.S. unemployment rate was 17.2 percent, down somewhat from its 1933 peak of 24.9 percent but still remarkably high. By comparison, in May 2003, the unemployment rate of 6.1 percent was the highest in nine years."

Please check this out.

 

I'm sure that it was just a gigantic coincidence that the economy fully recovered during all that spending in WWII.

Nope. Feel free to tell us.

 

As usual, the liberals in this group love to dance around the issue.

Just because Government spending went up as a percentage of GDP, they incorrectly assume this is the “equivalent” of an economic recovery.

Nothing could be further from the truth.

They refuse to look at private sector GDP growth from 1932-1946 because these data will not support the conclusions they are desperately looking for.

 

How was I dancing?

Nothing could be further from the truth. Why wouldn't Govt expenditures be a valid part of GDP just as private expenditures are?

I'm happy to look at it. What are the figures?

 

It didn't fully recover during WWII...it fully recovered AFTER WWII.

It's your data...back it up please.

 

No, it fully recovered during WWII. Real GDP was higher and unemployment was nil by 1942.

I made no such assertion. Pass.

 

Roon, you are absolutely correct.

You have a perfect right to ask them for these data.

The liberals in this group will never provide these figures because they know these data will blow their conclusions that the depression ended before the end of the war out of the water.

Many people will always delay and obfuscate when pressed with a statement or a conclusion they cannot defend.