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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: DuckTapeSunroof who wrote (36791)	9/4/2009 5:18:04 PM
From: TimF	Read Replies (1) \| Respond to of 71588

Generally "the stimulus" in the context of current events has referred to the fiscal stimulus, and most specifically the spending side. Spending kept going up in the 30s. What did happen though was that taxes where increased and money was tightened (also new regulations where added and support was given to unions). Only the stimulative government spending on the World War finally pulled America out of the Depression I think that effect has been exaggerated, ignoring the expansion of exports leading up to the war (which is different than the US government buying weapons since it isn't the government taking out of the US by borrowing and taxing, its other countries funneling cash to the US to buy our goods). And ignoring the effect of removing some of the problematic policies of the New Deal in the run up to, or early stages of US involvement in WWII. And more importantly ignoring the fact that the US economy during WWII wasn't so great, even compared to the depression, as many think. Price controls and rationing distorted economic measurements, and even with those distortions personal income did not grow strongly. One thing that did greatly improve was unemployment, and certainly all the government buying (and government's employing people in the military) had a lot to do with that, but overall the improvement was not exactly a sudden turn around due almost solely due to massive stimulus its often presented as being. It was not an all of the sudden thing, and also over that many years you would often expect a turn around without any government stimulus attempts (as long as the government isn't working in the opposite direction, with pro-cyclical policies, or policies that generally get in the way of growth).

To: DuckTapeSunroof who wrote (36791)	9/8/2009 1:25:35 AM
From: RMF	Read Replies (1) \| Respond to of 71588

Yeah, well, it was 1936 and the U.S. didn't have any history of running deficits, so you can't blame Roosevelt for pulling things in after he had pumped things up so much. Economics is NOT an exact science even now, let alone 1936. It IS a delicate balancing act but in a democracy there's ONE real heavy weight on one side of the scales and that's POLITICS. Reagan had the IDEAL situation in 1980. He wanted Volker to CRUSH the economy and squeeze it dry in the first three years because he KNEW it would all be UP from there and he'd go into the '84 election looking like he turned a TERRIBLE situation around. Anybody elected THIS year didn't have the flexibility that Reagan had. The whole country was looking into the abyss and there wasn't any guarantee that it would even survive, let alone "turn around". All the Republicans learned from Reagan (except Newt and a few others) was that the BEST thing you could do was CUT TAXES. They're STILL stuck on that mantra. Lose $1.7 Trillion in revenues from the Bush tax cuts? Well, the ONLY answer to that is to CUT TAXES.... How else are we gonna get these deficits down if we don't CUT TAXES...