Wednesday, January 20, 2016

HOW TO GET OUT OF GREAT DEPRESSIONS AND GREAT RECESSIONS

I'm sure you have heard that Roosevelt's policies did not get us out of the Great Depression but that it was WW-II that did it.  You hear this especially from Republicans.  But it wasn't the war per se that got us out of the Great Depression, it was massive government spending that did it with an assist from forced savings as there wasn't much to buy during WW-II.

So if we wanted to rapidly get out of the Great Recession of 2008-2009 what should we have done.  We should have had massive government spending.  Yes, Bush's (43) TRAP program to rescue the banks had some deficit spending and Obama's small stimulus fund plus his increased Defense budget helped keep the Great Recession from getting worse, but they weren't big enough to get us out of the Great Recession.  In WW-II everyone who had a lath or drill press or spot welder worked  for the government war effort.  So  what was needed was a "war on infrastructure"  of at least several trillion dollars.  But of course, we can go into massive debt for shooting wars but not for building roads, airports, bridges, and buildings, etc.

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