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

One thing I've never understood. If the New Deal prolonged the Depression, how did WW2, which was even more restrictions on the economy and more government spending, end it?
 
One thing I've never understood. If the New Deal prolonged the Depression, how did WW2, which was even more restrictions on the economy and more government spending, end it?

The traditional argument is that the massive influx of new jobs for war production did it. I've heard that one argued both ways. Frankly I think it was more of the same. Yes it fed people, but it didn't end the overall issue.

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

Frankly there were a good many causes to it, but I would say a close study of Hoover's and Congress's bungled attempts at intervention shows they did a lot to make it worse. Did some of the intervention help people in the immediate circumstance put food on their family tables, find work, and so on? Yes, but it is beginning to be increasingly understood that the trade-off was a much longer recovery time.

Again, if you look back through history at the Panics, which were more or less the same thing, the response had always been a hands-off approach, and recovery had always been quick and relatively smooth, so the idea that letting things stabilize naturally somehow caused things to get worse just does not match the evidence of history.
 

RousseauX

Donor
Frankly there were a good many causes to it, but I would say a close study of Hoover's and Congress's bungled attempts at intervention shows they did a lot to make it worse. Did some of the intervention help people in the immediate circumstance put food on their family tables, find work, and so on? Yes, but it is beginning to be increasingly understood that the trade-off was a much longer recovery time.

Again, if you look back through history at the Panics, which were more or less the same thing, the response had always been a hands-off approach, and recovery had always been quick and relatively smooth, so the idea that letting things stabilize naturally somehow caused things to get worse just does not match the evidence of history.
I think that would depend on the government program in question

As said by others, the new deal was a mixed bag: some programs helped the recovery, others didn't

price fixing on goods probably didn't help: ending the gold standard and handing out bonuses to WWI veterans did
 
I think that would depend on the government program in question

As said by others, the new deal was a mixed bag: some programs helped the recovery, others didn't

price fixing on goods probably didn't help: ending the gold standard and handing out bonuses to WWI veterans did

I personally don't agree with detaching the Dollar from gold, but that's a separate debate I think. As to the other, I have already said some aspects of the New Deal did help people in the moment, but more economists lately have begun to come aboard with the idea that overall, it prolonged the nation's suffering.

In the previous recessions the approach had always been largely hands-off, and recovery had typically been swift. Could some manner of aid have been provided to help people? Yes. Was the whole package necessary or any help to the country? I'd say not really.
 

RousseauX

Donor
I personally don't agree with detaching the Dollar from gold, but that's a separate debate I think. As to the other, I have already said some aspects of the New Deal did help people in the moment, but more economists lately have begun to come aboard with the idea that overall, it prolonged the nation's suffering.

In the previous recessions the approach had always been largely hands-off, and recovery had typically been swift. Could some manner of aid have been provided to help people? Yes. Was the whole package necessary or any help to the country? I'd say not really.
Most economists agree that the bonus bill was helpful

most Economists agreed that projects such as rural electrification and farm to market roads greatly enhanced standards of living and productivity for Americans

I think you are misrepresenting consensus among economists: most economists agree that certain parts of the new deal was helpful for the recovery and others not.

I personally don't agree with detaching the Dollar from gold
Detaching the dollar from the gold was what brought stability to the global economy: a flexible monetary policy greatly lowered the variance coming from business cycles

there was no more panic of 18xx and 19xx after the 1930s
 
And your point is?
If one guy was vice chair of UCLA's department of economics, it is interesting. If he later went out into the wild blue yonder and, say, adopted rather extreme Austrian views, well, I'm willing to give the guy somewhat of a hearing even though I've been through this before.

Along a similar line, I think the philosopher Derek Parfit was famous but also had somewhat extremist views in some areas. Although I kind of hope he's correct, especially when he talked about how he didn't believe there were logical reasons to fear death as much as we usually do, and this, even though I think he was an atheist. I think his views overlapped some with Buddhism (not that a Buddhist must necessarily be an atheist!)
 
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I think you are misrepresenting consensus among economists: most economists agree that certain parts of the new deal was helpful for the recovery and others not.

That is not the impression I have had from my own research, but your mileage of course may vary. As to the bonus bill? If memory serves that essentially extended benefits to WWI veterans early, and yes, that was a good idea.
 

RousseauX

Donor
That is not the impression I have had from my own research, but your mileage of course may vary. As to the bonus bill? If memory serves that essentially extended benefits to WWI veterans early, and yes, that was a good idea.
Which economists are you reading?
 

Hunter W.

Banned
Symptoms like the Stock Market Crash that started it all?



The Stock Market crashed in October 1928, the tariffs were implemented in June 1930- that's nearly two years of free market fundamentalism.

The crash occurred on the 29th of October 1929. I assume putting up tariffs was economic orthodoxy.
 

BlondieBC

Banned
The traditional argument is that the massive influx of new jobs for war production did it. I've heard that one argued both ways. Frankly I think it was more of the same. Yes it fed people, but it didn't end the overall issue.



Frankly there were a good many causes to it, but I would say a close study of Hoover's and Congress's bungled attempts at intervention shows they did a lot to make it worse. Did some of the intervention help people in the immediate circumstance put food on their family tables, find work, and so on? Yes, but it is beginning to be increasingly understood that the trade-off was a much longer recovery time.

Again, if you look back through history at the Panics, which were more or less the same thing, the response had always been a hands-off approach, and recovery had always been quick and relatively smooth, so the idea that letting things stabilize naturally somehow caused things to get worse just does not match the evidence of history.

I am not going to defend Hoover and Congress actions as wise. Nor after the stock bubble was blown, to say that a sharp recession (panic) could be avoid. But I believe if you look at the monetary flows (gold), and the orders that nations went into recession, it was clear the US Federal Reserve went the wrong way (contracting money supply even more than the panic did), and causing things to get much worse. There was also the issue of the liberty bonds needing to be retired in the 1930's. And since these bonds act like cash to a partial extent, they also reduced the money supply.

And then there is that Giant mess with Weimer. And the UK came back on to the gold standard at the wrong rate. The pound needed to be about 40% weaker than OTL.
 
https://books.google.com/books?id=d... stampeded toward the Gold Standard."&f=false

' . . . After 1870, most countries stampeded toward the Gold Standard. . . . To deepen the gold reserves, the rule was to tighten lending and currency in circulation. . . . toward a disconcerting deflation until 1896. . . . '

' . . . After the so-called "Long Depression" from 1873 to 1879, a low intensity economic progress lasted until 1896. This paltry rise was lacerated with financial crises. . . . '
Alright, maybe 1873 should be referred to as the six year Depression and the slow recovery, which still sounds real serious! :p
 
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You don't get into such high positions by being crackpots and not having an idea of what you're talking about.
Really? You're evidently unfamiliar with real academia. From Linus Pauling's vitamin C obsession to David Irving's Holocaust denial and Steven Koonin's denial of the reality of anthropomorphic climate change.
 

QueerSpear

Banned
No, scarcity is a result of the universe not containing infinite resources. If anything , centralized planning causes artificial scarcity. If the planning commission doesn't like X than X won't be made no matter how useful it is.

An infinite universe by definition has infinite resources. Now the Planet Earth has limited resources, but the universe? Endless.

Also we currently produce enough food to feed 10 billion people- by comparsion the world human population is 7.5 billion. And in the next few decades, continuous scientific research and technological development will mean that gap that exists between the amount of food produced versus the total world population is going to increase.

So why is it, that if we have more food than we need, we have not yet ended world hunger? The reason is simple, because it's not profitable for a small elite of useless parasites to actually help people. Also the numbers of empty houses far exceeds the number of homeless people in the United States.

Capitalism is, has always been and always will be an inefficient, overbloate and autocratic system that goes against human nature and is incapable of providing basic decency. It's an archaic system based on archaic presumptions about human nature and technology and has long outlived its usefulness.
 
One thing I've never understood. If the New Deal prolonged the Depression, how did WW2, which was even more restrictions on the economy and more government spending, end it?

Companies, not having consumer spending as a driver since the Depression, got a lot of war orders
Unemployment dropped
wages rose
workers(including women filling in for the men) didn't have goods to spend that money one, so saved in Banks and bought Bonds, restoring the Financial markets
 
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