[LS]

Much of this is possible. There are also some other possibilities. One is, NO ONE ever knows what the unknowns are.

In the 1990s, most conservative/free market economists thought that Bill Clinton's tax hikes would harm the U.S. economy---nothing like this, but there was a consensus. Well, the plunging oil prices and the phenomenal productivity gains of computers offset those hikes by several orders of magnitude.

The impact of lower energy prices, spread throughout the economy has still not been factored in by all those obsessed with housing numbers. Cheap energy covers a multitude of sins.

Last---who knows how long it will last---but just this week existing home sales rose 65%.

What made the 1930s different was that a) government got involved in the economy to a degree not even minutely touched here. Smoot-Hawley, for example, constituted a hit of 5% of GNP on the economy---not to mention Hoover's taxes, FDR's taxes, the minimum wage increases, foreign tariffs shutting off exports, and so on.

Now, I don't put it past Obama to utterly screw this up: if he pulls out of NAFTA, throws on protectionist tariffs, hikes taxes, and starts heaping on the regulation, we could still get there.

[ken21]

there are folks on this forum that want to pull out of nafta.

i get attacked by them all the time.

[misterrob]

The only way to save the economy from serious ruin is to pass a huge tax cut on capital gains, infrastructure and capital equipment spending tax cuts, immediate drilling for oil with major tax breaks for the oil sector to do so and a rollback in spending to levels seen a few years ago. The reduction in energy prices is a big stimulous for the economy.

Obama wins and there's no chance. McCain wins and he can take his case to the American people. With Democrats in the House and Senate good luck though.