David_N
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Basically, the anti-FDR argument on the data is based on (a) considering people employed by the WPA “unemployed” (even though they were getting paid, and building public works that are in use to this day) plus (b) always focusing on 1938 — the year in which the economy suffered a serious setback from the progress of the previous four years.
Let me offer two pictures, beyond what Eric provides, to clarify things.
First, here’s real GDP (in logs) from 1929 to 1941, plus the trend. (That’s to bypass the employment nonsense). You can see that the economy made up a lot of the output gap before the 1938 setback, but by no means all.
Now, you might say that the incomplete recovery shows that “pump-priming”, Keynesian fiscal policy doesn’t work. Except that the New Deal didn’t pursue Keynesian policies. Properly measured, that is, by using the cyclically adjusted deficit, fiscal policy was only modestly expansionary, at least compared with the depth of the slump. Here’s the Cary Brown estimates, from Brad DeLong:
Net stimulus of around 3 percent of GDP — not much, when you’ve got a 42 percent output gap. FDR might have been more of a Keynesian if Keynesian economics had existed — The General Theory wasn’t published until 1936. Note in particular that in 1937-38 FDR was persuaded to do the “responsible” thing and cut back — and that’s what led to the bad year in 1938, which to the WSJ crowd defines the New Deal.
Krugman obliterates the individuals who continue to claim that FDR made the depression worse.
http://krugman.blogs.nytimes.com/2008/11/08/new-deal-economics/?_r=1
is there a reason you posted this 8 year old article?
Several posters continue to claim that the "new deal" made the great depression worse. The data of the article doesn't matter when discussing the great depression that happened decades ago.
like who?
I won't name names. You can go here though: http://www.debatepolitics.com/gover...-helicopter-money-time-16.html#post1065833311
seems like you did a pretty decent job explaining your position in that thread, why start another one?
Because I want to have a discussion about the new deal, separate from a thread about "helicopter money."
Krugman obliterates the individuals who continue to claim that FDR made the depression worse.
http://krugman.blogs.nytimes.com/2008/11/08/new-deal-economics/?_r=1
None of which proves jack-squat. Without the New Deal, the recovery would have happened much sooner as businesses put money into their businesses instead of into the gov't. All the public works projects could have been paid for by taxing people who were working (spreading the tax load to everyone), instead of gutting our ability to produce by punitively taxing the people who had the financial ability to put people to work. Every apologist "study" I've ever seen has ignored the truth of what would have happened without the New Deal and instead focused on cherry-picking data to make the New Deal look like a good thing (as this study does).
It immediately disproves the absurd claim that the new deal somehow made the great depression worse, based on looking at the available data.None of which proves jack-squat.
Absolutely absurd claim. The great depression had led to a massive drop in people's savings, it was a crisis, everyone was hit, businesses were cutting back, laying workers off, people were digging into savings, banks were failing. It was a vicious downturn, and it would've gotten worse without the government stepping in. People weren't spending, which led to businesses losing sales, well, you know the cycle.. There's absolutely no reason that businesses would put money back into the economy when people don't have any money to spend.Without the New Deal, the recovery would have happened much sooner as businesses put money into their businesses instead of into the gov't.
What kind of nonsense is this? The new deal was built off of a deficit, you know, spending past tax receipts. And you seriously believe that placing a tax burden on millions of unemployed people/people who've lost everything would somehow fix the problem of low demand? This is what passes for nonsense.All the public works projects could have been paid for by taxing people who were working (spreading the tax load to everyone), instead of gutting our ability to produce by punitively taxing the people who had the financial ability to put people to work.
So where's your data? Are you going to show the downturn that occurred in the late 30's right after FDR cut spending.I've ever seen has ignored the truth of what would have happened without the New Deal and instead focused on cherry-picking data to make the New Deal look like a good thing (as this study does).
None of which proves jack-squat. Without the New Deal, the recovery would have happened much sooner....
And you can prove this how?
And you can prove this how?
Short of having a time machine and going back in time to change the course of history, all I have to work with is the facts that the New Deal didn't fix the problem, that gutting the finances of the people who had the ability to create jobs was a bad thing to do, that the GD only ended when we were pushed in a war economy (that was prior to our entering WWII, when we started providing material for the Brits, French, etc.). It was when we put people to work in the private sector that things finally turned around.
... instead of gutting our ability to produce by punitively taxing the people who had the financial ability to put people to work. ...
seems like you did a pretty decent job explaining your position in that thread, why start another one?
None of which proves jack-squat. Without the New Deal, the recovery would have happened much sooner as businesses put money into their businesses instead of into the gov't. All the public works projects could have been paid for by taxing people who were working (spreading the tax load to everyone), instead of gutting our ability to produce by punitively taxing the people who had the financial ability to put people to work. Every apologist "study" I've ever seen has ignored the truth of what would have happened without the New Deal and instead focused on cherry-picking data to make the New Deal look like a good thing (as this study does).
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