It took so long to reverse the Great Depression because it was a massive
example of letting the Financial Markets and Banks Fail while those who
were liquid in their assets took advantage of the situation, combined
with a massive drought, and a huge flue epidemic all one on top of
another. It took putting 12 Million People to work in CCC and WPA work
for welfare programs, a near 100 percent tax on income above
1,000.000.00 per year. The recovery was also stimulated by a
manufacturing shift and employment shift off of farms to war tooling and
eventually war. Then this was enhanced by the capping of prices on
commodities such as bread, milk and gas along with the rationing of the
same items. This forced people to save, when there is no product to
buy, you save. Credit was harder to obtain then, there were rules
preventing people and businesses from going too far in debt. Glass
Stegal Regulation was put in place. AND it took years to over come the
folly of the RICH that created a Global Depression and Financial
Thank goodness we were a bit wiser this time in not letting bad get
worse than it did. We could have done more to make the recovery happen
sooner. We can avoid going to WWIII to solve the problem of
Even FDR's Treasury Secretary disagreed with you assessment of government spending helping the economy.
Henry Morganthau, Jr. U.S. Secretary of the Treasury 1934-1945
"We have tried spending money. We are spending more than we have ever
spent before and it does not work. And I have just one interest, and if I
am wrong … somebody else can have my job. I want to see this country
prosperous. I want to see people get a job. I want to see people get
enough to eat. We have never made good on our promises. … I say after
eight years of this Administration we have just as much unemployment as
when we started. … And an enormous debt to boot."
Your welcome to that opinion. The fact for my family is that the debt
during that period provided roads, campgrounds and projects like
Schools, and the Hoover Dam. Much of which are used today, some of
which have continued future use. Debt also paid for WWI and WWII debt.
I'd rather avoid the conditions that caused WW's and we can. I am also
glad that the Government Stepped in and stopped starvation of the
masses, by the assistance programs. Yes, WWII was avoidable if the
Economics of the Period had not added fuel to the flames of excessive
That's not just my opinion, that is a direct quote from Franklin Franklin Delano Roosevelt's Treasury Secretary!
The stuff that was built may have been good, but what makes you think
that those things would not have existed without government spending?
Morgenthau is an interesting review point.
Morgenthau accepted Roosevelt’s double budget as legitimate — that is, a
balanced regular budget, and an “emergency” budget for agencies, like
the Works Progress Administration (WPA), Public Works Administration
(PWA) and Civilian Conservation Corps (CCC), that would be temporary
until full recovery was at hand. He fought against the veterans’ bonus
until Congress finally overrode Roosevelt’s veto and gave out $2.2
billion in 1936. In the 1937 "Depression within the Depression,"
Morgenthau was unable to persuade Roosevelt to desist from continued
deficit spending. Roosevelt continued to push for more spending, and
Morgenthau promoted a balanced budget. In 1937, however, Morgenthau
successfully convinced Roosevelt to finally focus on balancing the
budget through major spending cuts and tax increases; Keynesian
economists have argued that this new attempt by Roosevelt to balance the
budget created the Recession of 1937. On November 10, 1937, Morgenthau
gave a speech to the Academy of Political Science at New York's Hotel
Astor, in which he noted that the Depression had required deficit
spending, but that the government needed to cut spending to revive the
economy. In his speech, he said: You quoted that.....
HE ALSO SAID:
To reduce the deficit he argued for increased taxes, particularly on the wealthy.
"We have never begun to tax the people in this country the way they
should be..... I don't pay what I should. People in my class don't.
People who have it should pay."
All of the stuff you list in the first paragraph may be true but that
was before his quote that I presented to you. The quote I quoted was
from 1941. The things you listed were before that.
In 1937 he believed in more government spending, after 8 years of
government spending, and witnessing the results he admitted that the
spending did nothing but add to the debt.
You have quoted him too. Was your quote from before or after he had witnessed the poor results from government spending?
I quoted him because he is a man from YOUR side who agrees that your side's position of government spending is bad.
If you want to convince me by way of quote that your position is
correct, then find a quote from someone whose opinion I already respect
that agrees with your point.
Have you heard of the depressions/ recessions of 1921, 1980, and 2001?
Those all had the same potential to be bad as the great depression and
our current one. But rather than have the government "help," the
government stayed out of the way and our economy recovered.
During our current depression and the great depression, our government
has decided to try and "help" our economy. The great depression lasted
more than a decade and our current depression isn't over after four
For a very modern example of proving that cutting government spending is the way to go, let's look at Estonia: http://www.cnbc.com/id/49086123/
"Although Estonia’s economy shrank 18 percent in 2008-2009, the Baltic
state pulled itself out of the doldrums and managed to grow by 7.6
percent last year — five times the euro-zone average. The country joined
the currency bloc 18 months ago. The country has a national debt of
‘just’ 6 percent of GDP, which compares to Germany’s 81 percent and
Greece’s 165 percent of GDP.
How did Estonia get to these numbers? Following the 2008 economic
contraction, the Estonian government cut its budget by 6.1 billion
Estonian kroon (around $500 million) and its expenditure by 3.2 billion
Estonian kroon (around $260 million). By 2010 Estonia’s GDP grew by 3.1
percent, according to the country’s finance ministry."
IN 2007, the GDP of Estonia decreased by 1.4% in the 2nd quarter of
2008, over 3% in the 3rd quarter 2008, and over 9% in 4th quarter of
2008. The Estonian government made a supplementary negative budget, The
revenue of the budget was decreased for 2008 by EEK 6.1 billion and the
expenditure by EEK 3.2 billion. In 2010, the economic situation
stabilized and started a growth based on strong exports. In the fourth
quarter of 2010, Estonian industrial output increased by 23% compared to
the year before.
According to Eurostat data, Estonian PPS GDP per capita stood at 67% of
the EU average in 2008. In March 2011, the average monthly gross salary
in Estonia was 843€
However, there are vast disparities in GDP between different areas of
Estonia; currently, over half of the country's GDP is created in
Tallinn, the capital and largest city. In 2008, the GDP per capita of
Tallinn stood at 172% of the Estonian average, which makes the per
capital GDP of Tallinn as high as 115% of the European Union average,
exceeding the average levels of other counties. There are many poor
Unemployment rate is 11.7%, above the EU average, while real GDP growth
as of 2011 was 8.0%,five times the euro-zone average. As of 2012,
Estonia remains the only euro member with a budget surplus, and with a
national debt of only 6%, it is one of the least indebted countries in
Your example of Estonia was interesting. A former member of the USSR.
It has shale oil which produces its electricity but still they have to
import oil and use old USSR Nuclear Power Plants to produce all they
need. The use of these power generation methods have ruined a
significant amount of their environment. Their economy is heavily
dependent on construction jobs. Their average income is lower than the
EU so EU businesses are moving north for the attractive lower wages.
This increases the demand for power, and facilities needing to be built.
Yet their unemployment rate is above ours at over 11 percent. They
are a much smaller population and as such can make quicker changes as
needed. Their government being new is less complex and thus more
nimble. Even so they voted to approve an unbalanced budget in order to
get over the Financial Crisis hump. Their conclusion was this was
successful and mitigated the hardships of their citizens and businesses
positioning them for the prime spot for the world's recovery.
Thanks for expanding my understanding. Oh and they have Universal
Health Care paid for by the taxes they pay. They have a very high
standard of living in spite of paying a significantly higher tax rate
than we do... SO you want to be Estonia.... Pay more taxes.... Please
make my day.
I never said that I "want to be Estonia."
I presented one point of, very recent, evidence that showed a country
that was in debt and had a large amount of unemployed but it reduced
government spending and the unemployment rate fell and their national
That is one point of evidence for: reducing the size of a government resulting in improved numbers in its economy.
More government spending = more debt and higher unemployment
less government spending = less debt and lower unemployment
See Estonia for an example of these two facts.