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I'm not sure how true it is that "just letting things happen" was the formula for success before World War Two you claim for it. You have just given me incentive to read my copy of Heilbroner and Singer "The Economic Transformation of America"! While I agree that markets can be rational, there is such a thing as market failures. Mankiw mentions a few in his textbook. Charles Kindleberger in his book "Manias, Panics and Crashes: A History of Financial Crises" mentions even more. The question, of course, is what to do when things go badly wrong. While I defend the New Deal aims, I am open to consider there may be better ways to achieve them during such crises. But given the level of suffering that occurred then, especially in the wake of the Dust Bowl, and given that recovery was nowhere in sight, I believe the government needed to try some things we might not have otherwise contemplated. Asking starving people to wait for the market to correct itself is cruel, especially when so many were out of work. Getting America working again was a good idea, even if it did not, by itself, get us out of the Depression.

I believe there are genuine emergencies where people will die if government doesn't intervene. And there are long term crises where people will slowly fall behind without a little assistance. I think the challenge is to do so in such a way as to not undermine incentives to work and improve, and to do so in ways that do not weigh down economic growth. But I think we can do this now. Just as for the military, I think we can go smaller and smarter, and still be effective.

With regard to the depression, I suggest Murray Rothbard's "America's Great Depression." Admittedly, Rothbard is a bit conspiratorial, but his explanations of what economically happened in this book, go right to the point. By the way, it was the Republicans throwing money at the market, that prolonged the depression, which the market would have quickly adjusted. Democrats saw this, criticized it, and campaigned on a government reduction platform in 1932, only to do the opposite once elected.

I find your words just vague enough, that I really don't disagree with the most of what you said in reply #85. No criticism here, as I'm sure the same can be said about my words prior. I do however disagree with:

I think the challenge is to do so in such a way as to not undermine incentives to work and improve, and to do so in ways that do not weigh down economic growth. But I think we can do this now.

The challenge, is to address the problems, without limiting our freedoms. Or better still, address the problems, while increasing freedom.