No New Deal/WWII, how long until US recover from Great Depression

thorr97

Banned
Hadn't the rest of the world essentially "recovered" from the Great Depression by '36 or '37? This, right about when the US fall back into another recession? So, without the New Deal the US would've most likely recovered along with the rest of the world by the mid to late 30s.
 
The legacy of the new deal was to construct a fundamentally better social contract once the country came out of the depression and WWII, regardless of its stimulus affect on the economy or lack thereof

I would call that a matter of opinion, and one with which I would disagree, but to each their own.

Why did he call it a failure? Was it because it didn't go farhter enough or for something else?

He called it a failure because it had massively increased spending without noticeably alleviating poverty, thus increasing the very problem it was implemented to solve.

What were these "many interventionist laws and practices"? Do you have a non-biased source?

No source is without bias, no matter what your college professors told you. Welcome to humanity.

For an especially poignant example, I would point to the Smoot-Hawley Tariff Act of 1930, of which Hoover approved and which he enthusiastically signed into law. The end result was that many foreign nations reciprocally increased tariffs on American goods, cutting imports and exports massively in the following years. According to Robert Whaples in The Journal of Economic History, the general view among economists is that the Tariff Act of 1930 served to exacerbate what became the Great Depression.

TL;DR: He signed an interventionist legislative item to make things better, and it actually made things worse.

Naturally, there are those who disagree. The causes of the Depression were many, and not all are clearly understood to this day.

Historically, the evidence shows that a hands-off approach during the Panics of preceding years was a wise move. Recovery took only a few short years, as opposed to the New Deal approach. While the New Deal undoubtedly did help many in the immediate moment, I would argue the trade-off in the form of a much longer recovery was not worth it.
 

BlondieBC

Banned
No it didn't. That's a standard bogus attack based on ignorance of historical facts.

It was the failed policies of the Hoover administration based around the free market which turned a nasty recession into a depression, leading to thousands of businesses going bankrupt and the loss of millions of jobs. The so called Roosevelt Recession was triggered when FDR implemented fiscal conservative policies- indeed that the 1938 Recession is a perfect example of how useless fiscal conservatism is.

FDR raised taxes to balance the budget and the Federal Reserve implemented a contractionary policy (that is, the amount of money being spend was lower than the amount of tax revenue. Contractionary policies are implemented when you attempt for instance to pay off the debt or balance a budget). It was only when FDR reversed policies, increased the public works programs while the Reserve reversed the contractionary policies and eased credit.

It was the Fed shrinking the money supply in a recession. This turned a recession into a depression.
 

Iron Sun

Banned
For an especially poignant example, I would point to the Smoot-Hawley Tariff Act of 1930, of which Hoover approved and which he enthusiastically signed into law. The end result was that many foreign nations reciprocally increased tariffs on American goods, cutting imports and exports massively in the following years. According to Robert Whaples in The Journal of Economic History, the general view among economists is that the Tariff Act of 1930 served to exacerbate what became the Great Depression.
Of course, Hoover's "many interventionist laws and practices" consisted of Smoot-Hawley and...and...and...
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No source is without bias, no matter what your college professors told you. Welcome to humanity.
Nice cop-out.:rolleyes:
 
I think the more important fact one needs to examine is the sheer force of will that Franklin Roosevelt had to keep a dying country from tearing itself apart. Whatever the economic realities of Roosevelt's New Deal, it cannot be denied that it helped restore faith in the system that the country professed. Without a New Deal (assuming Roosevelt is either killed or not elected) it allows for more dangerous radicals to take the reigns and that ultimately will have far more reaching consequences. Senator Huey Long, for example, is someone that would likely embody every libertarian critique of an "Imperial Presidency." Then you have people like William Z. Foster who likely could've had the backing of Stalin. Or more insidiously someone like William Dudley Pelley or George Van Horn Moseley seeking to implement their own methods of "restoring order" to a nation consumed with angry Bonus Army veterans, an ever growing unemployed populace, and so forth.

The United States would likely recover without Roosevelt's New Deal, this is true. But who's to say if the United States would emerge whole or even as the nation most think of it as today?
 
Not to mention that the Great Depression's global rammifications would end up causing World War II in part because of the Treaty of Versailles, especially with the war debts

I think this was the biggest issue. The treaty combined with protectionism made the Great Depression what it was. Germany had to pay fairly large indemnities but protectionism made it difficult for it to earn money to do so. This in turn made it difficult for GB and France to pay their debt to the US. If the treaty was more lenient economically or the (better and more realistic) international trade was more free the Great Depression would probably have not happened. A downturn in the 1930's would probably have happened but it wouldn't have been as severe. The Nazis wouldn't have rose because it wouldn't have been as bad in Germany.
 
I think this was the biggest issue. The treaty combined with protectionism made the Great Depression what it was. Germany had to pay fairly large indemnities but protectionism made it difficult for it to earn money to do so. This in turn made it difficult for GB and France to pay their debt to the US. If the treaty was more lenient economically or the (better and more realistic) international trade was more free the Great Depression would probably have not happened. A downturn in the 1930's would probably have happened but it wouldn't have been as severe. The Nazis wouldn't have rose because it wouldn't have been as bad in Germany.

Indeed though the US would still bear the bunch of it especially because of the Dust Bowl thing.

I don't know of a scenario where World War II would be avoided, but the Great Depression still happens. The latter does do a lot to cause the former. The only way would be to pretty much have most of the effects be only on the US.
 
Hadn't the rest of the world essentially "recovered" from the Great Depression by '36 or '37? This, right about when the US fall back into another recession? So, without the New Deal the US would've most likely recovered along with the rest of the world by the mid to late 30s.

The US was coming out of the Great Depression along with everyone else at this time. However, FDR under the advice of Henry Morgenthau decided to attempt to balance the budget in 1937. The Fed was also concerned about the deficits that were run earlier decided to contract the money supply. These two things caused the the second dip in the economy and the spike in unemployment that is seen in 1938-1939. You can see the second dip in 1937 in the chart below. Without those actions, the US probably would have been out of the Great Depression along with the rest of the Western countries.

upload_2017-9-27_22-9-14.png
 
. . . In the past when the Panics struck every few decades, the reaction of government had been to do very little, sometimes plainly nothing, and in each such instance the economy rebounded in a few years . . .
I think the Panic of 1873 was pretty serious and took a number of years to recover from.
 

jbavarian

Banned
correct me if i am wrong, but don't through the blame squarely on a single persons shoulders. here's the events as i'e heard them, and please take this with a grain of salt as i haven't done research on this recently.

the Great Depression started when Wall Street ran out of money, causing the stock market crash, leading to a recession. had no one intervened, the world would have put itself back together(American Free Enterprise does that when unhindered), if NOT for the Actions of 2 Presidents: Herbert Hoover and Franklin Roosevelt. Hoover, a Republican, was the successor to Coolidge, a President known for doing NOTHING, which is why America, and by extension the world, did so well economically. when the crash happened, rather than do nothing and let America right itself, and being an Engineer, tried to fix the problem... and Failed, creating the depression. thus he lost the 1932 election. Roosevelt, an old Left(not like today's new left) Democrat, believing in big government, expanded the Governemnt to try to fix it. but he started drawing up war plans as he believed a WAR was necessary to rebuild the economy(Note, please fact check this). his policies tied with this believe meant america didn't recover... till war broke out in 1942. it took till at least late 1945 for the economy to reach a high level peace time economy. so, if Coolidge had run again, since he never meddled with the economy, i believe America would have fixed itself and put itself back on the track it belonged on by the time the rest of the world recovered, which could have been even earlier.

again, this is from what i've heard, and Information i've gathered from listening to people over the years and from Prager Universitie's videos on the topics and from the thread
 
Two of your "sources" are libertarian propaganda outlets. The third is a press release for an article by two fringe economists with ties to those organisations and other libertarian groups. Theirs is by no means a mainstream or majority opinion, in fact it's anything but. Having perused their article I find it unconvincing and deeply flawed.
 
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