Posted on 01/29/2009 4:56:18 AM PST by markomalley
“Then World War II came along and was the biggest stimulus plan ever.”
It was the war production that put people back to work and made the New Deal (which was an abject failure, as BO and his people must know) APPEAR to work.
"Interesting" is a word that I use when I'm trying ot be polite but want to say "completely $((@!(@* insane".
Although we produced a lot of armaments for WW II, there were so many restrictions on what people could buy you could argue that the consumer was still in the Depression through 1945. What got us out was the removal of rationing which freed pent up consumer demand, the removal of many of Roosevelt's counterproductive economic rules after the war and the fact that most of the factories in the world other than America's were in smoking ruins.
ping for later.
That’s funny. I’ve been arguing with libs for an entire week and they all told me that FDR’s New Deal was highly successful and brought us out of the Depression.
Now Obama comes along and says the New Deal wasn’t successful.
Am I missing something?
We need a John Galt — desperately.
The Republicans are historically correct, but that solution will not work in the current situation.
At the start of the Great Depression, the US was hit with severe deflation, accompanied by tremendous overproduction. “You could buy a pound of hamburger for a nickel, but nobody had any nickels.” The currency needed tremendous inflation along with a massive increase in the money supply. But, critically, this could be done because US debt levels were near zero.
Roosevelt’s plan was to reduce production, especially of agricultural products, then spend so much money that people would have money to spend. This would be done by creating debt.
This differs from today in many serious ways. To start with, we have a split economy. A “real” economy of goods and services, which has been in decline for many years, often through outsourcing. And a “fake”, or “leverage” economy, based solely on speculation, and speculation based on speculation.
So right now, it would be as if Roosevelt was trying to recuperate the ridiculously high margin stock market that existed before the crash. It not only can’t work, it shouldn’t work, because it was based solely on leverage, not reality. Houses that cost $100k to build cannot be sustained at sale prices of $750k. The market won’t tolerate it, for the best of all reasons: it makes no sense. It is demanding something for nothing.
To make matters much, much worse, not only are the leverage markets operating at debt levels a factor greater than the US ($150T compared to only $15T), the the credit and debt system is facing collapse. There is literally nobody left who has the money to pay for a US government spending spree. There is again literally, not enough money in the entire world to finance a return of the massive leverage markets.
“Leverage delenda est”. Leverage must be destroyed. It must, or else the real economy of goods and services cannot be rebuilt, ending the depression.
Imagine an insanely obese man. Hundreds of pounds of fat cover his muscles, bones, and internal organs. He is also running out of money to buy the 100 or so Big Macs he eats every day. His problem is not his lack of money, even though he has borrowed as much money as he can to keep gobbling down food.
He has to lose the vast amount of fat he has accumulated before he can even begin to restore his vitals. He has to stop spending what money he can borrow to sustain his obesity. By controlling his gluttony, with or without surgery to directly remove his pillows of lard, is the only way he can slim down enough to even stand up.
Finally, when all that blubber is gone, he can start exercising again, which will do wonders for restoring his health, as long as he does not start to overeat again.
From Obama’s point of view, the worst advice the Republicans can give, and what his own party is trying out, is to force feed even more Big Macs down the gullet, as fast as possible. Throw in doughnuts, cake, ice cream, pizza, and every other fatty food they can think of to keep his weight up at all costs. And to take loans out in his name for all of it.
It isn’t working. It won’t work. It can’t work. And it shouldn’t work.
Since the Left turns its back on sound principles, but want what it wants, it can only support its grabs for power and glory by pointing to the few times that its policies had even the appearance of success. Happily, even the MSM is now having to acknowledge that Roosevelt turned the post-19929 recession into a depression, that lasted many years longer than it should have. But since when have facts mattered to the Left?
Because a healthy, prosperous economy undermines their drive to gain absolute power by making all of us completely dependent on them.
“He who controls the present, controls the past. He who controls the past, controls the future.” George Orwell
IMO. there is no 2 party system. Expect Obama to be more Hawkish than we thought.(see appointees)
FDR also formed the SEC to make sure *outsiders* didn’t get into the Wall Street/Fed Reserve party.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.