FDR and his policies prolonged the Great Depression by 7 years

1938 -3.4%

Looks like a recession to me.

 

Government spending has nothing to do with the state of the economy. Bush and Obama have spent trillions of dollars, which is way more than FDR did, to stimulate the economy, and it's still garbage almost 3 years later.

It's also already been mentioned that the idea that government spending improves the economy is just a Keynesian lie that has been disproven countless times.

 

The peak in 29 was a "bubble". That's an artificial inflation in the value of the stocks.

1)No, unemployment didn't "spike back up". It went up a bit but 2-3% compared to a bit over 5% isn't a significant spike.

2) The unemployment rate nosedived under FDR. That started well BEFORE WWII. I'm not sure why you are attempting to retain that point. Do you think that tens of millions of jobs just reappear overnight particularly after a brutal economic downturn?

Lol... no it's not.

Even if it was, it's not redundant to cite a discrete component, however, since the GDP includes both positive and negative movements.

?!?!?! You think that debt just magically disappears overnight? Wow, you should tell that to the current federal government. That would solve ALOT of peoples' problems at least temporarily.

 

Those statements are facutal. The GD did not end in 1933.

You're putting words in my mouth. I did not say that it tells us the economy is improving. I said that it tells us the GDP is improving. Huge difference.

Wikipedia, the dictionary, and many economists disagree with that defintion.

GDP can be expanding while the rest of the economy is crap. That is happening right now.

They didn't. There is evidence that they prolonged the Depression, which could have rebounded much more quickly if the free market had done the corrections.

 

You are indeed correct, Dr. Righteous.

Here is the actual truth, and the liberals in this group cannot refute it.

 

History shows otherwise.

Actually, government spending as a percentage of the GDP has declined. As for the "way more than FDR", I guess you don't understand how annual inflation works and how a trillion in today's dollars would equal $62,894,386,355.05 in 1933.

It's been mentioned but it runs counter to the facts.

 

Agreed. It was caused by the Federal Reserve's monetary and credit policies.

What's your point? It still increased.

Nosedive is a bit of an exaggeration. It remained above 15% until the war. The only reason it went down is because many Americans were employed in the armed forces and women were recruited to the workforce.

Umm, yes it does. GDP measures economic output. That includes industrial production. Where did you get the silly idea that it doesn't?

But GDP was increasing anyway, we've already established this. It's redundant of you to pull out a discrete component which is consistent with what we've already established. There's no disagreement here on this point.

 

Your say-so is not good enough.

Wrong.

Actually I do. I said he spent way more than FDR, which is true. FDR did not spend trillions of dollars on The New Deal.

According to who?

Your say-so is not good enough.

 

No. Less people were able to go into debt because they couldn't afford to take out loans. That's why the credit debt level was decreasing.

 

It may have been exacerbated by the Fed's policies but it certainly wasn't caused by the Fed's policies.

I thought the point was obvious. It increased,yes but it didn't spike.

It went from 25% to 15% well before WWII. It spiked again when FDR cut federal spending.

Ok. So it does.

However, that doesn't change the fact that GDP includes both positive AND negative transactions so separating industrial production from GDP is still not redundant.

When was that established? GDP declined from 29 to 33.

 

That doesn't forgive existing debt.

 

Now I am very confused!! In another thread I posted with you in, you claimed that the Nazis were left-wing, and you attempted to prove it by pointing out the Keynesian style economic policies they put into place. Now you will have us look at Nazi Germany as a model to follow??? You need to keep your arguments consistent.


So lets look at the FACTS about FDR and the USA once more.

Year - % chg real GDP
1930 -8.6%
1931 -6.5%
1932 -13.1%
1933 -1.3% <-FDR takes office, implements "New Deal"
1934 +10.9%
1935 +8.9%
1936 +13.1%
1937 +5.1%
1938 -3.4%
1939 +8.1%
1940 +8.8%


and


Average rate of unemployment
in 1929: 3.2%
in 1930: 8.9%
in 1931: 16.3%
in 1932: 24.1%
in 1933: 24.9%
in 1934: 21.7%
in 1935: 20.1%
in 1936: 16.9%
in 1937: 14.3%
in 1938: 19.0%
in 1939: 17.2%3


Now lets look at government spending.



Growth of Government During the Great Depression

Government Expenditures and Investments (in current dollars)
Hoover Administration, 1929-1939
in 1929: $9.4 billion
in 1930: $10.0
in 1931: $9.9
in 1932: $8.7
Average government spending as percentage of GDP, 1929-32: 12.0%

Roosevelt's New Deal
in 1933: $8.7 billion
in 1934: $10.5
in 1935: $10.9
in 1936: $13.1
in 1937: $12.8
in 1938: $13.8
in 1939: $14.8
Average government spending as percentage of GDP, 1933-39: 15.4%

Mobilization for WWII
in 1940: $15.0 billion
in 1941: $26.5
in 1942: $62.7
in 1943: $94.8
in 1944: $105.3
in 1945: $93


Now look at the correlation between the numbers. Now clearly correlation does not equal causation, but in this circumstance it certainly seems as if it is a matter of causation not correlation.

 

I see an accidental admission that Keynes was right...

What's this.. another closet Keynesian? I believe so!

And yet another one! Hallelujah!

No, no, no... you don't get to start at the peak in 1929 and compare it to 1940 and use that as a basis to bash FDR when he didn't even take over until 1933. You have to use 1933 to 1940, which goes from ~41 to ~158... almost a quadrupling.

Changes the picture a bit, doesn't it?

More Keynes-talk, and about infrastructure, my personal pet project!

You ain't kiddin'. I would've gone for $1 trillion+ on infrastructure alone, in addition to auto-stabilizers, aid to states, etc...

 

Please tell me you're joking. If not, then this represents a failure to understand the very reasoning behind the Soviets maintaining a sphere of influence in the region. They were never going to willingly give that area up.

The third term that he won the year before the U.S. got into the war?

I've been trying to read this entire thread, so forgive me if it was someone else and not you, but did you say at one point that the depression ended once the war machine geared up and the government put people to work in the factories producing guns, bombs, tanks and planes?

If so, then you're contradicting yourself for expendiency's sake.

 

It's not a contradiction. Getting dragged into a world war is not the same as the same old failed Keynesian policies.

Truth is, if WWII had not happened, FDR would have died and left another president a lousy economy.

 

No, it doesn't, but it limited the ability of new debt being created.

 

http://www.politicalforum.com/political-opinions-beliefs/172839-fed-caused-great-depression.html

What point are you trying to make aside from arguing semantics?

15% is not a healthy unemployment rate. But then again, you ARE a liberal - these rates are acceptable in socialist systems, so it doesn't surprise me that you find it acceptable. The only reason unemployment would spike after government spending was cut would be if government jobs were cut, which doesn't really count. Or if the government yanked funding from the private sector, as it should have.

That's true, but still, we had already established that the average output of all economic sectors (GDP), grew positively from 1934 on. Pointing out that a certain sector of the economy was expanding does not really add anything of value to the discussion becuase we already know the GDP was expanding. For what you're saying to mean anything, you would have to demonstrate certain sectors of the economy which were contracting (which some certainly were), not expanding.

Correct. Iriemon has posted the data at least 20 times in this thread. GDP began expanding again after 1933.

 

Whether or not it was a choice is irrelevant. You (plural) say that the war ended the depression because it put factories back into production and workers back into the factories. Regardless of the reason, you still have a massive public jobs program --- the government paying industry to hire workers and produce goods and services. And the economy went north.

Monetarists don't believe that. They believe the Federal Reserve is primarily responsible for growth, and that public policy usually gets in the way. Shoot, Milton Friedman's big complaint about FDR was that he didn't expand the money supply nearly enough.

Austrians, what few exist despite their coverage, publicity and vocal-ness, certainly don't buy that. According to them, public expenditures crowd out private expenditures... so how could a massive jobs program possibly lift a country out of mass unemployment without creating massive problems elsewhere?

If you believe that the war ended the depression, then you are necessarily coming out as an advocate for basic Keynesianism, because Keynesians are the only ones that buy into that framework.

 

It's absolutely relevant. FDR's policies were a failure. WWII saved his ass. Had he died without a war, some other President would have inherited his rotten economy.

And when the war ended, there was recession.

There was no justification other than war for running up that much debt.

 

No, it's really not.

Completely outside the realm of what I'm talking to you about.

And again, you can't possibly believe that the war ended the depression unless you atleast subconsciously subscribe to Keynes' view. FDR's New Deal policies is 100% not what I'm talking about.

Supply shocks, I know. Shades of 1920 all over again.

 

What was the long term economic impact of WWII? There was none. The war ended. Most munition industries were shuttered. Bases closed.

It's asinine to suggest that the ramp up and maintenance of a war machine are Keynesian, since a the threat of a global tyrant can't be controlled and is merely a case of the right place at the right time. There's no guarantee you win.

Would you say the outcome of WWII was Keynesian for Japan or Germany? After all, they had substantial munitions investment, too.

 

None? At all? No millions of soldiers returning home and creating a huge labor surplus? No millions of women who now had a desire to join the workforce? No massive amounts of exports the US shipped out to destroyed European economies? No massive quantities of European and Asian land available for use in agriculture instead of rotting corpses, sending world market prices tumbling?

No long-term economic impact? Really?

WTF are you even talking about? Whatever it is, it's not about economics, unless you're trying to say the rules of econ apply if you get thrust into a war as opposed to you willingly choose to be in one...

Uh.. yeah. Germany would never have recovered so quickly without having the government directly put unemployed people back to work, a fundamentally Keynesian concept.

 

That's just crap. Germany and Japan got their asses kicked. The parts of the world they lost got swallowed up by communists...100% Keyensian and 100% failure.

All cults end badly, dude.

Get out while you can.

 

Completely irrelevant once again. As if military success is in a cause/effect scenario with economic recovery?

<<<Mod Edit:Insult removed>>>

 

It does. If you lose the war, your Keynsian investment is for naught.

Get help.