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I was reading about the Great Depression last night, with 25% unemployment, and after austerity measures put in place in 1937, it spiked to 19% in 1938 as GDP contracted, and stayed above 14% until the start of WWII.
Now, if you compare that to the Great Recession, with a bubble that was comparable in magnitude, we have seen slow, but steady improvement in unemployment from the peak of about 10% in 2009. The stimulus put out the house fire.
After a huge financial shock is not the time to be cheap.
All this deficit stuff is silly when the economy is still wheezing and working guys in their prime are out of work. I think we need to launch a stimulus targeted directly toward the primary victims of this recession. Working class guys with a high school education or less, recent college graduates, and state employees.
I would propose:
1) Massive infrastructure projects. Replacing bridges, repairing highways, building rails to trails recreational trails, air ports,etc. This would employ the guys who were kicked out of work by the housing bubble. And ideally these would be efforts that would benefit us for decades to come.
2) Innovation competitions for college students and recent graduates to spur entrepreneurism. The kids could get a one to three year fellowship or grant to try out new business ideas, housed at universities, companies, or even working for themselves. These would be competitive and would give the educated kids on the sidelines the chance to show off and grow their skills.
3) Direct grants to the states to pub state workers back to work, keep schools open, and lower public sector unemployment. These would be three year grants.
Although this would increase the budget deficit in the immediate future, all the efforts are targeted to prime certain sectors of the private and public sectors that are in the tank right now. I suspect that they would all catalyze economic growth and consumer demand and get people back to work. When that happens, our revenues will increase and the deficit will go down.
- Massive bridge building? roads? I thought the 1st stimulus plan was going to do that?
- Did HP founders, Google, Apple, Microsoft, Intel, Walmart etc..need "innovation competitions?
- State workers are not hurting when compared to everyone else. The bloated local, state and federal work force was long over due to a downsizing.
FDR's Treasury, Henry Morgenthau said before Congress in 1939;
"As the Great Depression persisted, even Treasury Secretary Henry Morgenthau admitted that the New Deal had been a failure. On May 6, 1939, he confessed, “We are spending more than we have ever spent before and it does not work. . . . We have never made good on our promises. . . . I say after eight years of this Administration we have just as much unemployment as when we started. . . . And an enormous debt to boot!”
Obama and the Liberals refuse to learn from FDR's mistakes so with luck he will not be reelected and Romney will learn from FDR's mistakes.
When Democrats want to make a sales pitch for the stimulus, they always talk about roads, bridges, and other stuff that people want. But when they actually dole out the money, the roads and bridges get pushed aside and the money goes to other stuff. In my area they spent $500,000 in stimulus money on arts projects, including puppet shows. Seattle - Arts - News
They also spent over $500,000 to replace windows in a Visitor's center at Mt. St. Helens. The only problem--the center was closed in 2007, and there are no plans to re-open it. The center was built in 1993 by the Forest Service at a cost of $11.5 million, but was closed in 2007 because it wasn't needed.
- Massive bridge building? roads? I thought the 1st stimulus plan was going to do that?
- Did HP founders, Google, Apple, Microsoft, Intel, Walmart etc..need "innovation competitions?
- State workers are not hurting when compared to everyone else. The bloated local, state and federal work force was long over due to a downsizing.
FDR's Treasury, Henry Morgenthau said before Congress in 1939;
"As the Great Depression persisted, even Treasury Secretary Henry Morgenthau admitted that the New Deal had been a failure. On May 6, 1939, he confessed, “We are spending more than we have ever spent before and it does not work. . . . We have never made good on our promises. . . . I say after eight years of this Administration we have just as much unemployment as when we started. . . . And an enormous debt to boot!”
Obama and the Liberals refuse to learn from FDR's mistakes so with luck he will not be reelected and Romney will learn from FDR's mistakes.
I love when todays libs try to compare Obama to FDR.
FDR did not do welfare, He did WPA that is how the roads and bridges were built. Massive manual labor.
only 6 % of the stimulous was used for infra structure the rest like spitting in the wind.
What's the idea here? That we should start more wars? (Only those who don't understand history though believe that it was the war itself that brought us out of our malaise).
I love when todays libs try to compare Obama to FDR.
FDR did not do welfare, He did WPA that is how the roads and bridges were built. Massive manual labor.
only 6 % of the stimulous was used for infra structure the rest like spitting in the wind.
Well, I'd like to see 60% for infrastructure, 20% for the college kids, and 20% for the states. Just those three things. No spitting or wind.
Well, I'd like to see 60% for infrastructure, 20% for the college kids, and 20% for the states. Just those three things. No spitting or wind.
Tell me how giving people money to do things they are going to do anyways, stimulates?
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