Perspective: How It All Happened

[NYcarbineer]

Gee....you didn't have to go far to prove you're a fool....

...just refer to Brookings and Arthur Schlesinger, Jr and John Maynard Keynes, as the 'rightwing mythology.'


Nice work!

It is a rightwing myth now. You believe it. Rightwingers love to attach a token liberal or two their myths.

Those are quotes.
They stand for themselves.
The represent the considered opinions of Brookings and Arthur Schlesinger, Jr and John Maynard Keynes,


Do you know what quotes are....or is this another word I have to teach you.

The Brookings Institution was not 'liberal' in 1935.

For a modern day quote from a Brookings paper on FDR and the Depression, consider this:

One crucial lesson from the 1930s is that a small fiscal expansion has
only small effects. I wrote a paper in 1992 that said that fiscal policy was not the key
engine of recovery in the Depression. From this, some have concluded that I do not
believe fiscal policy can work today or could have worked in the 1930s. Nothing could
be farther than the truth. My argument paralleled E. Cary Brown’s famous conclusion
that in the Great Depression, fiscal policy failed to generate recovery “not because it
does not work, but because it was not tried.”

...

This discussion of fiscal and monetary policy in the 1930s leads me to
a third lesson from the Great Depression: beware of cutting back on
stimulus too soon.

http://www.brookings.edu/~/media/events/2009/3/09 lessons/0309_lessons_romer.pdf

Two important lessons to be learned by a tyro debater like yourself are

1. think before you post
2. don't post research you don't understand

You're welcome.

 

[TemplarKormac]

Conservatives in the 19th century lost the battle to preserve slavery. Conservatives in the 20th century lost the battle to preserve segregation.

They also lost the battle to prevent women's suffrage.

Conservatives in the 21st century are losing the battle against gay rights.

This is just how history works. Conservatives in every generation are always on the wrong side of history when it comes to the important social issues of that generation.

Liberals win the battles, the spoils of victory become the status quo, and the next generation of conservatives become more liberal than their predecessors,

but they find their own contemporary battles to eventually lose.

They were not conservatives, you twit.


They were Democrats.

Democrats: members of the party of slavery, segregation, sedition, and secularization.

Don't try to squirm out of your heritage.
Wear your label and be proud!

Zell Miller is a Democrat. He is a Conservative. He endorsed Bush and McCain for president. He worked for Lester Maddox. He is a hero of the modern American Right. He is probably a hero of yours.

Southern Democrats in the post Civil War era up until the shift that occurred from 1964 on were mostly CONSERVATIVES.

That is common knowledge. That is irrefutable fact.

To deny irrefutable fact is the lowest form of stupidity.

In this state, Zell Miller is nothing but a flip flopper. Georgians around here do not like him. And as you know, we're redder than a fresh picked rose. Your mistake is always attributing conservative with republican. Democrats can be conservative as well, that still doesn't change the fact that they are still Democrats. That party has been leftist in nature ever since it's inception. You might as well accept it, as poor Jake found out in that thread of mine, the name DEMOCRAT is associated with slavery, segregation, sedition and secularism.

If you still don't think they're racist, just criticize Obama and see how quickly they respond with "It's because he's black, isn't it?"

You're flailing, reaching. Give it up.

 

[TemplarKormac]

It is a rightwing myth now. You believe it. Rightwingers love to attach a token liberal or two their myths.

Those are quotes.
They stand for themselves.
The represent the considered opinions of Brookings and Arthur Schlesinger, Jr and John Maynard Keynes,


Do you know what quotes are....or is this another word I have to teach you.

The Brookings Institution was not 'liberal' in 1935.

For a modern day quote on FDR and the Depression, consider this:

One crucial lesson from the 1930s is that a small fiscal expansion has
only small effects. I wrote a paper in 1992 that said that fiscal policy was not the key
engine of recovery in the Depression. From this, some have concluded that I do not
believe fiscal policy can work today or could have worked in the 1930s. Nothing could
be farther than the truth. My argument paralleled E. Cary Brown’s famous conclusion
that in the Great Depression, fiscal policy failed to generate recovery “not because it
does not work, but because it was not tried.”

...

This discussion of fiscal and monetary policy in the 1930s leads me to
a third lesson from the Great Depression: beware of cutting back on
stimulus too soon.

http://www.brookings.edu/~/media/events/2009/3/09 lessons/0309_lessons_romer.pdf

Two important lessons to be learned by a tyro debater like yourself are

1. think before you post
2. don't post research you don't understand

You're welcome.

There is such a thing as spoiling people rotten, Carbine. You have no credibility when you cite John Maynard Keynes. You practically admit that his economic theorems are the bases of this administration's economic policy. Keynesian economics is why we've run up more debt in the past 5 years than we have in the previous 8 combined. You have literally no respect for people do you?

 

[Geaux4it]

Dems were the slave masters and it was the NRA that came to the slaves need

-Geaux

 

[NYcarbineer]

Those two are about as far from 'facts' as one can get.



1. In 1931, in some of the darkest days of the Great Depression and the middle of the Hoover administration, unemployment rate stood at 17.4 %. Seven years later, after five years of FDR, and literally hundred s of wildly ambitious new government programs, more than doubling of federal spending, the national unemployment rate stood at – 17.4 %. At no point during the 1930’s did unemployment go below 14 %. Even in 1941, in the midst of the military buildup, 9.9 % of American workers were unemployed.
March 4, 1933, in his first Inaugural Address, FDR said “Our greatest primary task is to put people to work.” This meant that the New Deal was a wretched, ill-conceived failure.

2. Arthur Schlesinger, Jr., liberal New Deal historian wrote in The National Experience, in 1963, “Though the policies of the Hundred Days had ended despair, they had not produce recovery…” He also wrote honestly about the devastating crash of 1937- in the midst of the “second New Deal” and Roosevelt’s second term. “The collapse in the months after September 1937 was actually more severe than it had been in the first nine months of the depression: national income fell 13 %, payrolls 35 %, durable goods production 50 %, profits 78% .




3. In 1935, the Brookings Institution (left-leaning) delivered a 900-page report on the New Deal and the National Recovery Administration, concluding that “ on the whole it retarded recovery.”
The Real Deal - Society and Culture - AEI

4. John Maynard Keynes, in a letter published in the NYTimes, December 31, 1933, warned “ even wise and necessary Reform may, in some respects, impede and complicate Recovery. For it will upset the confidence of the business world and weaken their existing motives to action.” Even Keynes saw the danger in treating the nation’s capitalists as an enemy, as “the unscrupulous money changers,” as FDR called them in his first Inaugural.





5. FDR and government solutions worsened the recession into a Depression.
Warren Harding inherited one of the sharpest recessions in American history in 1921. By July it was over. Harding and Treasury Sec’y Mellon cut government expenditures by 40 %, allowing wages to fall, in a natural recovery to full employment. The cuts, and even sharper tax cuts under Coolidge, produced the long period of growth and rising living standards associated with the Roaring Twenties.




6. 'In The High Tide of American Conservatism: Davis, Coolidge, and the 1924 Election," Garland Tucker casts new light on the election and the two candidates, Democrat John W. Davis and Republican Calvin Coolidge.
He quotes Paul Rubin: "We now know that FDR's policies likely prolonged the Great Depression because the economy never fully recovered in the 1930s, and actually got worse in the latter half of the decade." And then, quotes Paul Johnson: "Coolidge Prosperity was huge, real, widespread and it showed that the concept of a property-owning democracy could be realized."





For scholars, FDR is no longer off limits for study....and the above represent the direction revelations are going.

Of course, these revelations will have no moment for religious fanatics of a Liberal bent...such as you, BoringFriendlessGuy.



You may now return to genuflecting in front of the FDR icon......

The popular rightwing mythology in the above has been thoroughly debunked several times on this board, and yet,

according to one of my rules about the right, it comes back again and again.

More proof that conservatives are ineducable.

Gee....you didn't have to go far to prove you're a fool....

...just refer to Brookings and Arthur Schlesinger, Jr and John Maynard Keynes, as the 'rightwing mythology.'


Nice work!

What really happened during the Depression:

In 1937, after five years of sustained economic growth and a steadily declining unemployment rate, the Roosevelt Administration began to worry more about possible inflation and the size of the federal deficit than the ability of the economy to sustain the recovery.

As a consequence, in the fall of 1937, FDR supported those in his administration who advocated a reduction in federal expenditures (i.e. stimulus spending) and a balanced budget. The results — which included a massive reduction in the number of people employed by such programs as the WPA — were catastrophic.

From the fall of 1937 to the summer of 1938, industrial production declined by 33 percent; wages by 35 percent; national income by 13 percent; and not surprisingly, the unemployment rate rose by roughly 5 percentage points, with an estimated 4 million workers losing their jobs.

The economic downturn caused by the decline in federal spending was commonly referred to as the “Roosevelt recession,” and to counter it, FDR asked Congress in April of 1938 to support a substantial increase in federal spending and lending. Unlike the current situation, Congress backed FDR’s request, and as a result, the recovery was soon underway again.

Equally important, the lessons drawn from the 1937-38 recession convinced FDR that deficit spending and monetary expansion were critical to economic recovery.

In essence, the Roosevelt Administration, through hard experience, finally endorsed Keynesian economics,

and over the course of the next seven years, government spending on the economy — increasingly fueled by the demands of World War II — would grow to unprecedented levels, all but wiping out unemployment (which fell to below 2 percent by 1943) and turning the United States into a global super-power in the process.

Repeating Our Mistakes: The ?Roosevelt Recession? and the Danger of Austerity | Roosevelt Institute

 

[TemplarKormac]

And you might try this on for size.

The Misesian Case against Keynes - Hans-Hermann Hoppe - Mises Daily

 

[Bfgrn]

Those are quotes.
They stand for themselves.
The represent the considered opinions of Brookings and Arthur Schlesinger, Jr and John Maynard Keynes,


Do you know what quotes are....or is this another word I have to teach you.

The Brookings Institution was not 'liberal' in 1935.

For a modern day quote on FDR and the Depression, consider this:

One crucial lesson from the 1930s is that a small fiscal expansion has
only small effects. I wrote a paper in 1992 that said that fiscal policy was not the key
engine of recovery in the Depression. From this, some have concluded that I do not
believe fiscal policy can work today or could have worked in the 1930s. Nothing could
be farther than the truth. My argument paralleled E. Cary Brown’s famous conclusion
that in the Great Depression, fiscal policy failed to generate recovery “not because it
does not work, but because it was not tried.”

...

This discussion of fiscal and monetary policy in the 1930s leads me to
a third lesson from the Great Depression: beware of cutting back on
stimulus too soon.

http://www.brookings.edu/~/media/events/2009/3/09 lessons/0309_lessons_romer.pdf

Two important lessons to be learned by a tyro debater like yourself are

1. think before you post
2. don't post research you don't understand

You're welcome.

There is such a thing as spoiling people rotten, Carbine. You have no credibility when you cite John Maynard Keynes. You practically admit that his economic theorems are the bases of this administration's economic policy. Keynesian economics is why we've run up more debt in the past 5 years than we have in the previous 8 combined. You have literally no respect for people do you?

Ronbo Reagan and George W. Bush are Keynesians?

We have run up more debt in the past 5 years because of the total failure in the previous 8 years.

"The debt explosion has resulted not from big spending by the Democrats, but instead the Republican Party's embrace, about three decades ago, of the insidious doctrine that deficits don't matter if they result from tax cuts."
David Stockman - Director of the Office of Management and Budget for U.S. President Ronald Reagan.

 

[NYcarbineer]

Those are quotes.
They stand for themselves.
The represent the considered opinions of Brookings and Arthur Schlesinger, Jr and John Maynard Keynes,


Do you know what quotes are....or is this another word I have to teach you.

The Brookings Institution was not 'liberal' in 1935.

For a modern day quote on FDR and the Depression, consider this:

One crucial lesson from the 1930s is that a small fiscal expansion has
only small effects. I wrote a paper in 1992 that said that fiscal policy was not the key
engine of recovery in the Depression. From this, some have concluded that I do not
believe fiscal policy can work today or could have worked in the 1930s. Nothing could
be farther than the truth. My argument paralleled E. Cary Brown’s famous conclusion
that in the Great Depression, fiscal policy failed to generate recovery “not because it
does not work, but because it was not tried.”

...

This discussion of fiscal and monetary policy in the 1930s leads me to
a third lesson from the Great Depression: beware of cutting back on
stimulus too soon.

http://www.brookings.edu/~/media/events/2009/3/09 lessons/0309_lessons_romer.pdf

Two important lessons to be learned by a tyro debater like yourself are

1. think before you post
2. don't post research you don't understand

You're welcome.

There is such a thing as spoiling people rotten, Carbine. You have no credibility when you cite John Maynard Keynes. You practically admit that his economic theorems are the bases of this administration's economic policy. Keynesian economics is why we've run up more debt in the past 5 years than we have in the previous 8 combined. You have literally no respect for people do you?

I was cleaning up PC's misinformation.

 

[Bfgrn]

And you might try this on for size.

The Misesian Case against Keynes - Hans-Hermann Hoppe - Mises Daily

Try this on for size, provide one country in history that ran it's economy on the Austrian School?

 

[TemplarKormac]

The popular rightwing mythology in the above has been thoroughly debunked several times on this board, and yet,

according to one of my rules about the right, it comes back again and again.

More proof that conservatives are ineducable.

Gee....you didn't have to go far to prove you're a fool....

...just refer to Brookings and Arthur Schlesinger, Jr and John Maynard Keynes, as the 'rightwing mythology.'


Nice work!

What really happened during the Depression:

In 1937, after five years of sustained economic growth and a steadily declining unemployment rate, the Roosevelt Administration began to worry more about possible inflation and the size of the federal deficit than the ability of the economy to sustain the recovery.

As a consequence, in the fall of 1937, FDR supported those in his administration who advocated a reduction in federal expenditures (i.e. stimulus spending) and a balanced budget. The results — which included a massive reduction in the number of people employed by such programs as the WPA — were catastrophic.

From the fall of 1937 to the summer of 1938, industrial production declined by 33 percent; wages by 35 percent; national income by 13 percent; and not surprisingly, the unemployment rate rose by roughly 5 percentage points, with an estimated 4 million workers losing their jobs.

The economic downturn caused by the decline in federal spending was commonly referred to as the “Roosevelt recession,” and to counter it, FDR asked Congress in April of 1938 to support a substantial increase in federal spending and lending. Unlike the current situation, Congress backed FDR’s request, and as a result, the recovery was soon underway again.

Equally important, the lessons drawn from the 1937-38 recession convinced FDR that deficit spending and monetary expansion were critical to economic recovery.

In essence, the Roosevelt Administration, through hard experience, finally endorsed Keynesian economics,

and over the course of the next seven years, government spending on the economy — increasingly fueled by the demands of World War II — would grow to unprecedented levels, all but wiping out unemployment (which fell to below 2 percent by 1943) and turning the United States into a global super-power in the process.

Repeating Our Mistakes: The ?Roosevelt Recession? and the Danger of Austerity | Roosevelt Institute

The 1970's stagflation and the sub-prime bubble come to mind as dangers of the Keynesian model, and why it ultimately proved to be a failure.

Here is an exchange between The New Yorker's John Cassidy and Paul Samuelson in the Fall of 1996 at his office at M.I.T.:

Q: “Why did Keynesianism go into decline?”

Samuelson answered my question in three parts. Firstly, he said, Keynesian economists and policymakers made the mistake of projecting the experience of the Great Depression onto the post-war era. When the military conflict ended, and defense spending started falling, they expected the economy to go into another slump. “That isn’t what happened at all,” Samuelson said. “People came back (from the war) and they were eager to consume. What is more, they had the wherewithal to consume.”

Secondly, it turned out that, contrary to what Keynes had said in “The General Theory,” monetary policy mattered a lot. “In 1936, money had no important role,” Samuelson recalled. “Interest rates were one-eighth of one-eighth of one per cent. I did some research, and I found that the interest on one million dollars of ninety-day Treasuries was $37. People didn’t even bother to collect it. The Fed wasn’t important. During the war, the rumor went around that it’s authority would be stripped out and given to one of the wartime agencies. Post-war, money did matter. Milton Friedman et al turned out to be right. Where I fault my English colleagues is that they didn’t change when the situation changed. The English Keynesians got stuck too close to Model A Keynesianism.”

The final blow to Keynesianism was stagflation: the combination of rising inflation and unemployment, which emerged in the early nineteen-seventies. In any democracy, Samuelson noted, there is a temptation for the government to try and stimulate the economy, even if that leads to a modest rise in inflation. “You bite the apple,” Samuelson said. “You know you can do it, so you are damn well going to do it. The temptation was to over-use it. It was a disease that Lord Beveridge (an early English Keynesian), Alvin Hansen (an early American Keynesian) and, indeed, Keynes, in some moods, were aware of. They suspected that at really full-employment you would have an incipient inflation problem.” It was this fear, Samuelson recalled, that led to direct restrictions on wages and prices—so called prices and incomes policies—but these measures didn’t have much success. “There’s nothing in Keynesian economics that would allow you to solve stagflation. But there’s nothing in neoclassical economics that would allow you to solve stagflation, either. Except, if you don’t allow unions to exist, or you don’t allow the poorest fifty-one per cent of the population to use the levers of politics in order to shift the income distribution in their way.” Nevertheless, Samuelson went on, “the failure to solve the ongoing problem of stagflation was the most important nail in the coffin of Keynesianism.”

http://www.newyorker.com/online/blogs/johncassidy/2009/12/postscript-paul-samuelson.html

 

[TemplarKormac]

The Brookings Institution was not 'liberal' in 1935.

For a modern day quote on FDR and the Depression, consider this:

One crucial lesson from the 1930s is that a small fiscal expansion has
only small effects. I wrote a paper in 1992 that said that fiscal policy was not the key
engine of recovery in the Depression. From this, some have concluded that I do not
believe fiscal policy can work today or could have worked in the 1930s. Nothing could
be farther than the truth. My argument paralleled E. Cary Brown’s famous conclusion
that in the Great Depression, fiscal policy failed to generate recovery “not because it
does not work, but because it was not tried.”

...

This discussion of fiscal and monetary policy in the 1930s leads me to
a third lesson from the Great Depression: beware of cutting back on
stimulus too soon.

http://www.brookings.edu/~/media/events/2009/3/09 lessons/0309_lessons_romer.pdf

Two important lessons to be learned by a tyro debater like yourself are

1. think before you post
2. don't post research you don't understand

You're welcome.

There is such a thing as spoiling people rotten, Carbine. You have no credibility when you cite John Maynard Keynes. You practically admit that his economic theorems are the bases of this administration's economic policy. Keynesian economics is why we've run up more debt in the past 5 years than we have in the previous 8 combined. You have literally no respect for people do you?

I was cleaning up PC's misinformation.

I just cleaned up yours.

 

[NYcarbineer]

Keynes never advocated never paying back the money you might borrow in hard times for the purpose of stimulus.

 

[NYcarbineer]

Gee....you didn't have to go far to prove you're a fool....

...just refer to Brookings and Arthur Schlesinger, Jr and John Maynard Keynes, as the 'rightwing mythology.'


Nice work!

What really happened during the Depression:

In 1937, after five years of sustained economic growth and a steadily declining unemployment rate, the Roosevelt Administration began to worry more about possible inflation and the size of the federal deficit than the ability of the economy to sustain the recovery.

As a consequence, in the fall of 1937, FDR supported those in his administration who advocated a reduction in federal expenditures (i.e. stimulus spending) and a balanced budget. The results — which included a massive reduction in the number of people employed by such programs as the WPA — were catastrophic.

From the fall of 1937 to the summer of 1938, industrial production declined by 33 percent; wages by 35 percent; national income by 13 percent; and not surprisingly, the unemployment rate rose by roughly 5 percentage points, with an estimated 4 million workers losing their jobs.

The economic downturn caused by the decline in federal spending was commonly referred to as the “Roosevelt recession,” and to counter it, FDR asked Congress in April of 1938 to support a substantial increase in federal spending and lending. Unlike the current situation, Congress backed FDR’s request, and as a result, the recovery was soon underway again.

Equally important, the lessons drawn from the 1937-38 recession convinced FDR that deficit spending and monetary expansion were critical to economic recovery.

In essence, the Roosevelt Administration, through hard experience, finally endorsed Keynesian economics,

and over the course of the next seven years, government spending on the economy — increasingly fueled by the demands of World War II — would grow to unprecedented levels, all but wiping out unemployment (which fell to below 2 percent by 1943) and turning the United States into a global super-power in the process.

Repeating Our Mistakes: The ?Roosevelt Recession? and the Danger of Austerity | Roosevelt Institute

The 1970's stagflation and the sub-prime bubble come to mind as dangers of the Keynesian model, and why it ultimately proved to be a failure.

Here is an exchange between The New Yorker's John Cassidy and Paul Samuelson in the Fall of 1996 at his office at M.I.T.:

Q: “Why did Keynesianism go into decline?”

Samuelson answered my question in three parts. Firstly, he said, Keynesian economists and policymakers made the mistake of projecting the experience of the Great Depression onto the post-war era. When the military conflict ended, and defense spending started falling, they expected the economy to go into another slump. “That isn’t what happened at all,” Samuelson said. “People came back (from the war) and they were eager to consume. What is more, they had the wherewithal to consume.”

Secondly, it turned out that, contrary to what Keynes had said in “The General Theory,” monetary policy mattered a lot. “In 1936, money had no important role,” Samuelson recalled. “Interest rates were one-eighth of one-eighth of one per cent. I did some research, and I found that the interest on one million dollars of ninety-day Treasuries was $37. People didn’t even bother to collect it. The Fed wasn’t important. During the war, the rumor went around that it’s authority would be stripped out and given to one of the wartime agencies. Post-war, money did matter. Milton Friedman et al turned out to be right. Where I fault my English colleagues is that they didn’t change when the situation changed. The English Keynesians got stuck too close to Model A Keynesianism.”

The final blow to Keynesianism was stagflation: the combination of rising inflation and unemployment, which emerged in the early nineteen-seventies. In any democracy, Samuelson noted, there is a temptation for the government to try and stimulate the economy, even if that leads to a modest rise in inflation. “You bite the apple,” Samuelson said. “You know you can do it, so you are damn well going to do it. The temptation was to over-use it. It was a disease that Lord Beveridge (an early English Keynesian), Alvin Hansen (an early American Keynesian) and, indeed, Keynes, in some moods, were aware of. They suspected that at really full-employment you would have an incipient inflation problem.” It was this fear, Samuelson recalled, that led to direct restrictions on wages and prices—so called prices and incomes policies—but these measures didn’t have much success. “There’s nothing in Keynesian economics that would allow you to solve stagflation. But there’s nothing in neoclassical economics that would allow you to solve stagflation, either. Except, if you don’t allow unions to exist, or you don’t allow the poorest fifty-one per cent of the population to use the levers of politics in order to shift the income distribution in their way.” Nevertheless, Samuelson went on, “the failure to solve the ongoing problem of stagflation was the most important nail in the coffin of Keynesianism.”

Postscript: Paul Samuelson : The New Yorker

Ok, so if as you're suggesting, Keynesian economics were abandoned in the 70's, then who do we blame for the following era of massive unprecedented peacetime deficits?

 

[TemplarKormac]

And you might try this on for size.

The Misesian Case against Keynes - Hans-Hermann Hoppe - Mises Daily

Try this on for size, provide one country in history that ran it's economy on the Austrian School?

You're living in one of them. The United States up until a few years ago was operating it's economy in lock step with it. Before the establishment of the Fed, the Country had *GASP* a central bank.

The main philosophy at the the Austrian School of Economic Thought since the 1500's was that every individual plays a role in shaping a society and the economy is driven by entrepreneurial spirit, not by bloated, debt-ridden governments doling out subsidy cheques.

Do you have something bigger? This doesn't fit.

 

[TemplarKormac]

Keynes never advocated never paying back the money you might borrow in hard times for the purpose of stimulus.

Then how come we aren't paying them back, Carbine? I would like to see where he explicitly stated that. Keynesian economics relies on inflation. When there isn't any, well it falls flat on it's face.

 

[TemplarKormac]

What really happened during the Depression:

In 1937, after five years of sustained economic growth and a steadily declining unemployment rate, the Roosevelt Administration began to worry more about possible inflation and the size of the federal deficit than the ability of the economy to sustain the recovery.

As a consequence, in the fall of 1937, FDR supported those in his administration who advocated a reduction in federal expenditures (i.e. stimulus spending) and a balanced budget. The results — which included a massive reduction in the number of people employed by such programs as the WPA — were catastrophic.

From the fall of 1937 to the summer of 1938, industrial production declined by 33 percent; wages by 35 percent; national income by 13 percent; and not surprisingly, the unemployment rate rose by roughly 5 percentage points, with an estimated 4 million workers losing their jobs.

The economic downturn caused by the decline in federal spending was commonly referred to as the “Roosevelt recession,” and to counter it, FDR asked Congress in April of 1938 to support a substantial increase in federal spending and lending. Unlike the current situation, Congress backed FDR’s request, and as a result, the recovery was soon underway again.

Equally important, the lessons drawn from the 1937-38 recession convinced FDR that deficit spending and monetary expansion were critical to economic recovery.

In essence, the Roosevelt Administration, through hard experience, finally endorsed Keynesian economics,

and over the course of the next seven years, government spending on the economy — increasingly fueled by the demands of World War II — would grow to unprecedented levels, all but wiping out unemployment (which fell to below 2 percent by 1943) and turning the United States into a global super-power in the process.

Repeating Our Mistakes: The ?Roosevelt Recession? and the Danger of Austerity | Roosevelt Institute

The 1970's stagflation and the sub-prime bubble come to mind as dangers of the Keynesian model, and why it ultimately proved to be a failure.

Here is an exchange between The New Yorker's John Cassidy and Paul Samuelson in the Fall of 1996 at his office at M.I.T.:

Q: “Why did Keynesianism go into decline?”

Samuelson answered my question in three parts. Firstly, he said, Keynesian economists and policymakers made the mistake of projecting the experience of the Great Depression onto the post-war era. When the military conflict ended, and defense spending started falling, they expected the economy to go into another slump. “That isn’t what happened at all,” Samuelson said. “People came back (from the war) and they were eager to consume. What is more, they had the wherewithal to consume.”

Secondly, it turned out that, contrary to what Keynes had said in “The General Theory,” monetary policy mattered a lot. “In 1936, money had no important role,” Samuelson recalled. “Interest rates were one-eighth of one-eighth of one per cent. I did some research, and I found that the interest on one million dollars of ninety-day Treasuries was $37. People didn’t even bother to collect it. The Fed wasn’t important. During the war, the rumor went around that it’s authority would be stripped out and given to one of the wartime agencies. Post-war, money did matter. Milton Friedman et al turned out to be right. Where I fault my English colleagues is that they didn’t change when the situation changed. The English Keynesians got stuck too close to Model A Keynesianism.”

The final blow to Keynesianism was stagflation: the combination of rising inflation and unemployment, which emerged in the early nineteen-seventies. In any democracy, Samuelson noted, there is a temptation for the government to try and stimulate the economy, even if that leads to a modest rise in inflation. “You bite the apple,” Samuelson said. “You know you can do it, so you are damn well going to do it. The temptation was to over-use it. It was a disease that Lord Beveridge (an early English Keynesian), Alvin Hansen (an early American Keynesian) and, indeed, Keynes, in some moods, were aware of. They suspected that at really full-employment you would have an incipient inflation problem.” It was this fear, Samuelson recalled, that led to direct restrictions on wages and prices—so called prices and incomes policies—but these measures didn’t have much success. “There’s nothing in Keynesian economics that would allow you to solve stagflation. But there’s nothing in neoclassical economics that would allow you to solve stagflation, either. Except, if you don’t allow unions to exist, or you don’t allow the poorest fifty-one per cent of the population to use the levers of politics in order to shift the income distribution in their way.” Nevertheless, Samuelson went on, “the failure to solve the ongoing problem of stagflation was the most important nail in the coffin of Keynesianism.”

Postscript: Paul Samuelson : The New Yorker

Ok, so if as you're suggesting, Keynesian economics were abandoned in the 70's, then who do we blame for the following era of massive unprecedented peacetime deficits?

Not who, but what. That would be the bits and pieces of it that were left over from the collapse. We aren't moving the goalposts, Carbine, I'm blaming the theory, not a certain person.

 

[TemplarKormac]

Keynes never advocated never paying back the money you might borrow in hard times for the purpose of stimulus.

I require proof of that assertion. But the burning question is:

Why does Keynesianism all but ignore monetary policy? Why does it focus on "disposable" income?

 

[Bfgrn]

And you might try this on for size.

The Misesian Case against Keynes - Hans-Hermann Hoppe - Mises Daily

Try this on for size, provide one country in history that ran it's economy on the Austrian School?

You're living in one of them. The United States up until a few years ago was operating it's economy in lock step with it. Before the establishment of the Fed, the Country had *GASP* a central bank.

The main philosophy at the the Austrian School of Economic Thought since the 1500's was that every individual plays a role in shaping a society and the economy is driven by entrepreneurial spirit, not by bloated, debt-ridden governments doling out subsidy cheques.

Do you have something bigger? This doesn't fit.

Really? Holy fuck, you better inform your fellow 'Misesians'

**Is there a nation or country that has an economy based on Austrian school?**

Daily Paul Liberty Forum

Anybody know if there is a nation or country that has an economy based on the Austrian school that does not have a central bank and/or uses debt free money or a commodity based currency? It would be great if we could find a country like this to compare how they are doing in terms of spending, national debt, inflation, etc. since it could be used as proof that Austrian economics is superior to other economic schools.

I believe Austria and Switzerland both have central banks and fiat money, right?

One of the Federal Reserve videos talks about a city (in Europe I believe) that uses debt free money. Anybody know the name of the video and which city and nation they talked about?

 

[Freewill]

The Civil Rights bill was passed with a coalition of Northern Republicans and Northern Democrats. They defeated the coalition of Southern Democrats and Southern Republicans. The southern population of course blamed President Johnson, a Democrat, and soon began voting for Republicans. Which is ironic because a hundred years ago the southern population was hell bent on killing as many Republicans activist (giving Blacks voting rights) as possible.

Step right up folks and see history revised before your eyes.

 

[TemplarKormac]

The Brookings Institution was not 'liberal' in 1935.

For a modern day quote on FDR and the Depression, consider this:

One crucial lesson from the 1930s is that a small fiscal expansion has
only small effects. I wrote a paper in 1992 that said that fiscal policy was not the key
engine of recovery in the Depression. From this, some have concluded that I do not
believe fiscal policy can work today or could have worked in the 1930s. Nothing could
be farther than the truth. My argument paralleled E. Cary Brown’s famous conclusion
that in the Great Depression, fiscal policy failed to generate recovery “not because it
does not work, but because it was not tried.”

...

This discussion of fiscal and monetary policy in the 1930s leads me to
a third lesson from the Great Depression: beware of cutting back on
stimulus too soon.

http://www.brookings.edu/~/media/events/2009/3/09 lessons/0309_lessons_romer.pdf

Two important lessons to be learned by a tyro debater like yourself are

1. think before you post
2. don't post research you don't understand

You're welcome.

There is such a thing as spoiling people rotten, Carbine. You have no credibility when you cite John Maynard Keynes. You practically admit that his economic theorems are the bases of this administration's economic policy. Keynesian economics is why we've run up more debt in the past 5 years than we have in the previous 8 combined. You have literally no respect for people do you?

Ronald Reagan and George W. Bush are Keynesians?

We have run up more debt in the past 5 years because of the total failure in the previous 8 years.

"The debt explosion has resulted not from big spending by the Democrats, but instead the Republican Party's embrace, about three decades ago, of the insidious doctrine that deficits don't matter if they result from tax cuts."
David Stockman - Director of the Office of Management and Budget for U.S. President Ronald Reagan.

Where did I say that?

Nah, you just discredited your entire argument by blaming Bush. In 5 years, Obama has spent more than Bush in his two terms in office. That fact is undeniable. You cannot work your way around it.