Well friends, here we go yet again. A quick analysis of our present day woes and how we arrived here: President Hoover got us into debt and World War II actually helped get us out. President Bush got us in again and to his credit he started trying to get us out. Though he mostly threw money at the bankers and we know where that got us today.
In the Great Depression, President Roosevelt tried deficit spending but was too timid. When he stopped in 1937, the economy nose-dived. It took humongous deficits of World War II to pull us out of the Great Depression.
After the war, we had to pay off a huge national debt. During that time from 1946 to 1980, the economy was quite prosperous. Although we hit a bad recession when Ronald Reagan took office. He continued to drive up the debt through the boom years that followed. That didn’t make any sense.
We are now into the worst slump since 1938 and we better hope President Obama can fix it because that was not a pretty time. Unfortunately, as in the Great Depression, the extreme conservatives would rather trash the country than have our government succeed. They are much worse than Bush.
Most Republicans would rather not see their country crushed by a depression just to prove a point, even if it was correct. But extreme conservatives fought recovery in the last depression and Roosevelt did not spend enough from 1933-1941 to get us out of it. Only World War II provided the excuse for the enormous deficits that finally jolted the economy out of depression and into overdrive.
The main thing to remember perhaps is that with consumer spending down, business lays people off; they don’t hire people. You can’t blame business for this. Rough times are synonymous with reductions in force (RIFs). It’s a vicious cycle that the economy gets into. And you can’t blame consumers for not spending in bad times. It’s merely self preservation. The only way out of this presumably if we do not want to wait ten years is for the government to spend, pay unemployment insurance, or give tax breaks to the people who will spend, though not to the rich.
There is also a grave problem with the banks. President Obama should stop saving the bankers entirely and just take over the bad banks. Once they’re working they can be sold back to the private sector. What a novel concept!