The Great Depression - why did it end?

[DiveCon]

Only 6% of homes are in foreclosure.

Nice try at deflecting the blame from the real problem, which is the $519 trillion dollar derivative bubble.

LOL
you are a part of the real problem

Personal attack.

Another deflection.

People sitting on their butts collecting government checks like you are the problem.

you know nothing about me
so you are LYING

however, you as a self proclaimed realtor, have more than likely convinced someone that they could afford a house beyond their ability to pay
just so you could get a larger commission
if you say you havent, then i know you are LYING

 

[johnrocks]

Fed. created the bubbles. Read Greenspan's Bubbles [ame=http://www.amazon.com/GREENSPANS-BUBBLES-IGNORANCE-FEDERAL-RESERVE/dp/0071591583]Amazon.com: GREENSPAN'S BUBBLES: THE AGE OF IGNORANCE AT THE FEDERAL RESERVE: William Fleckenstein, Fred Sheehan: Books[/ame]

You can even read this
The Mess Greenspan Leaves - Stefan Karlsson - Mises Institute it was posted 12/26/2005, well before this mess took center stage.

From the stock market crash of 1987 to the S&L crisis of the early 1990s to the Asian crisis and the collapse of LTCM to the feared Y2K crisis to the bursting of the tech stock bubble, Greenspan has proven himself more than willing to bail out failed investors with additional doses of "liquidity" (the popular inflationist euphemism for inflation).

The result of this has been to increase the willingness of investors to participate in speculative bubbles because they know that if things go wrong and they are unable to get out before the bubble burst, their good friend Alan Greenspan will bail them out and limit their losses. Greenspan has thus been responsible for bubbles like the tech stock bubble and the housing bubble both by suppressing interest rates and providing the "liquidity" needed to create the bubbles, and also by reducing investors fear of losses after the bubble bursts by creating the expectations that the Fed will bail them out.

The consequences of this have been great. Instead of falling as a result of increased production, the consumer price index rose nearly 74% between August 1987 and November 2005, an average annual increase of 3.1%. This, together with the even greater asset price increases means that the purchasing power of the dollar has been sharply reduced, something which in turn has constituted large scale "confiscations of wealth," as the 1966 Alan Greenspan described inflation.

Moreover, the illusionary paper wealth created by Greenspan's bubbles has in turn greatly encouraged people to reduce their savings and increase their debts. The gross national savings rate has fallen since 1987 from 16.5% to 13%, and the net national savings rate from 4.5% to 1%. (During the third quarter this year it fell below zero due to Katrina-related damages). This decline in savings has come entirely in the household sector, as the household savings rate has fallen from 7% to -1%. Similarly, the private sector debt burden has increased from 120% of GDP to 153%. Again, this increase has been concentrated in the household sector where debt has increased from 77% of disposable income to 121%. Mortgage debt in particular has increased, from 51% to 91% of disposable income.

 

[Chris]

LOL
you are a part of the real problem

Personal attack.

Another deflection.

People sitting on their butts collecting government checks like you are the problem.

you know nothing about me
so you are LYING

however, you as a self proclaimed realtor, have more than likely convinced someone that they could afford a house beyond their ability to pay
just so you could get a larger commission
if you say you havent, then i know you are LYING

That shows what an ignoramus you are.

I have no idea what people can afford. Realtors don't get involved with people's credit. That's what mortgage officers do. In fact I lost about $30,000 worth of business over the last three years because my mortgage officer was so conservative. But their company is still in business because of that.

Enjoy spending my tax dollars.

 

[DiveCon]

Personal attack.

Another deflection.

People sitting on their butts collecting government checks like you are the problem.

you know nothing about me
so you are LYING

however, you as a self proclaimed realtor, have more than likely convinced someone that they could afford a house beyond their ability to pay
just so you could get a larger commission
if you say you havent, then i know you are LYING

That shows what an ignoramus you are.

I have no idea what people can afford. Realtors don't get involved with people's credit. That's what mortgage officers do. In fact I lost about $30,000 worth of business over the last three years because my mortgage officer was so conservative. But their company is still in business because of that.

Enjoy spending my tax dollars.

i dont spend your tax dollars, asshole
LOL
and sure you do, you know because they tell you
and you convince them they can

 

[LiveUninhibited]

Both sides here love insults. Hopefully they know it doesn't help them make their points. I suppose it can be amusing.

 

[Old Rocks]

Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. ...

This is an obvious admission that you don't have a clue about basic economics, a basic liberal trait.

I knew I would find a member of the Catostomidae with that quote from Eisenhower.

Dwight D. Eisenhower Quotes - The Quotations Page

Eisenhower, more than any man, knew the waste and futility of war. He was a good President, and a great leader in the Second World War.

 

[glockmail]

Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. ...

This is an obvious admission that you don't have a clue about basic economics, a basic liberal trait.

I knew I would find a member of the Catostomidae with that quote from Eisenhower.

Dwight D. Eisenhower Quotes - The Quotations Page

Eisenhower, more than any man, knew the waste and futility of war. He was a good President, and a great leader in the Second World War.

That was my quote not Ike's. And it's very true.

 

[Aimee Huhes]

There are a number of opinions about why and how The Great Depression ended. That World War II was the definitive catalyst is rarely argued. The war opened up several new markets for the US and gave them a competitive advantage over other countries. This, along with the deregulation of certain sectors in the war time raised employment and gave the failing economy the kick start that it needed. You can check out Shmoop for more resource materials and information on the Great Depression.

 

[editec]

EVERYTHING that happened post WWII conspired to make the USA come out of the depression folks and begin to thrive in a way it had never done in the past.

Selecting just one or two thing is missing the point of what an economy really is.

The economy is not one or two benchmarks, it is EVERYTHING which is occurring.

But Here's some of those things which did so much for our economy post WWII:

1. A huge pent up demand for consumer goods

2. A large amount of money in the hands of the consumers because they could not spend their war prodcution money during the war

3. A huge amount of investment capital available since the investor class had made so much money supplying the war.

4. The GI bill sending 12 million people to colleges who'd had NO CHANCE to go to college before the war

5. The fact that Europe was in a shambles, had practically NO industry and needed to rebuild so they ended up buying American

6. STrong union power thus insuring that the working class would get their fair share of the profits.

7. VERY HIGH taxes on the wealthy (about 90%) thus giving them every incentive to reinvest profits back into industry rather than pay taxes on it.

8. A continued MASSIVE amount of spending on the military industrial complex.

9. A startling spike in childbirths necessitating a huge demand for conumser goods typical of growing families.

10. The implementation of techological advances into private industry which had been developed during the period of manufacturing for war.

All those things eventually contributed to the period from about 1955 till about 1969 to make the American Middle class wealthier, which naturally mades EVERY CLASS in American better off.

 

[Truthmatters]

that chart always ends the discussion.

No it doesn't, this is just another in a long line of non-correlaries that get presented by the likes of yourself. Two things happening at the same time does not mean that one caused the other.

File:Gdp20-40.jpg - Wikipedia, the free encyclopedia


Maybe you better look at it again

 

[Truthmatters]

VERY HIGH taxes on the wealthy (about 90%) thus giving them every incentive to reinvest profits back into industry rather than pay taxes on it.


This a point that doesnt get enough play.

good stuff editec

 

[Red Dawn]

its so relevant to now

It really isn't. We haven't even reached the economic lows established in the late 70s, much less the 30s. But, I'll forget that and stay on topic.

Economic studies have indicated that just as the downturn was spread worldwide by the rigidities of the Gold Standard, it was suspending gold convertibility (or devaluing the currency in gold terms) that did most to make recovery possible.

US recovery is generally agreed to have begun in the spring of 1933. There is no consensus among economists regarding the motive force for the U.S. economic expansion that continued through most of the Roosevelt years (and the sharp contraction of the 1937 recession that interrupted it). According to Christina Romer, the money supply growth caused by huge gold inflows was a crucial source of the recovery of the United States economy, and that fiscal policy and World War II were of little help.

Of course, it depends on who you ask.

It seems an awful big coincidence though, that the recover really hit full swing with WW II, don't you think?

either way, massive government spending ended it.

Massive spending on arms or public works projects, take your pick.


Either theory blows out of the water, the rightwing asertion that governmnet spending made things worse.

 

[Toro]

either way, massive government spending ended it.

Massive spending on arms or public works projects, take your pick.


Either theory blows out of the water, the rightwing asertion that governmnet spending made things worse.

Also, several Depression-era laws such as FDIC also ended the Depression.

However, the criticism that FDR fixed prices too high inhibited the recovery is a valid criticism that has been demonstrated empirically.

Net-net, the Depression ended because of FDR's policies and because the market finally cleared, even though some of FDR's policies inhibited price discovery.

 

[editec]

It really isn't. We haven't even reached the economic lows established in the late 70s, much less the 30s. But, I'll forget that and stay on topic.

Economic studies have indicated that just as the downturn was spread worldwide by the rigidities of the Gold Standard, it was suspending gold convertibility (or devaluing the currency in gold terms) that did most to make recovery possible.

US recovery is generally agreed to have begun in the spring of 1933. There is no consensus among economists regarding the motive force for the U.S. economic expansion that continued through most of the Roosevelt years (and the sharp contraction of the 1937 recession that interrupted it). According to Christina Romer, the money supply growth caused by huge gold inflows was a crucial source of the recovery of the United States economy, and that fiscal policy and World War II were of little help.

Of course, it depends on who you ask.

It seems an awful big coincidence though, that the recover really hit full swing with WW II, don't you think?

either way, massive government spending ended it.

Massive spending on arms or public works projects, take your pick.


Either theory blows out of the water, the rightwing asertion that governmnet spending made things worse.

The miscommunication problem, RD is that that when some of the tools here say "worse" and when you say "worse" you're talking about two very different definitions of "worse"

To some very wealthy people, the economy on the rocks only means their liquidity will serve to buy them an even greater share of the nation's assets.

To the rest of us, an economy on the rocks means OUR ECONOMY is on the rocks.

So using terms like that tend to get us all confused.

 

[editec]

either way, massive government spending ended it.

Massive spending on arms or public works projects, take your pick.


Either theory blows out of the water, the rightwing asertion that governmnet spending made things worse.

Also, several Depression-era laws such as FDIC also ended the Depression.

However, the criticism that FDR fixed prices too high inhibited the recovery is a valid criticism that has been demonstrated empirically.

Net-net, the Depression ended because of FDR's policies and because the market finally cleared, even though some of FDR's policies inhibited price discovery.

I think it quite reasonable to suggest that not everything FDR did helped the economy, and that some things he did likely worked against his goal.

The above is a fair criticism, for example.

And can we all ALSO agree, that while FDR's actions probably saved a LOT of Americans from indigency, even though that his New Deal policies were not in and of themselves, THE solution?

I think even the most ardent supporter of FDR's New Deal would agree to that criiticism.

World War two put enormous amounts of money into circulation (while not giving people anything to spend it on!) and put tens of millions of Americans to work in PRIVATE INDUSTRY as well as in GOVERNMENT SERVICE.

World War II ENDED the unemployment problem for Americans far more than the conservation corps and all the other government work New Deal programs ever could have, because of the SCALE difference between a feeble amount of social spending versus an all out military war economy.

We ALL understand that, right?

 

[Red Dawn]

It seems an awful big coincidence though, that the recover really hit full swing with WW II, don't you think?

either way, massive government spending ended it.

Massive spending on arms or public works projects, take your pick.


Either theory blows out of the water, the rightwing asertion that governmnet spending made things worse.

The miscommunication problem, RD is that that when some of the tools here say "worse" and when you say "worse" you're talking about two very different definitions of "worse"

To some very wealthy people, the economy on the rocks only means their liquidity will serve to buy them an even greater share of the nation's assets.

To the rest of us, an economy on the rocks means OUR ECONOMY is on the rocks.

So using terms like that tend to get us all confused.

good point.


still, either way, massive government spending got us out of the great depression. So, the libetarian and rightwing fools who say government spending made it worse have a lot of explaining to do .

 

[Kevin_Kennedy]

It really isn't. We haven't even reached the economic lows established in the late 70s, much less the 30s. But, I'll forget that and stay on topic.

Economic studies have indicated that just as the downturn was spread worldwide by the rigidities of the Gold Standard, it was suspending gold convertibility (or devaluing the currency in gold terms) that did most to make recovery possible.

US recovery is generally agreed to have begun in the spring of 1933. There is no consensus among economists regarding the motive force for the U.S. economic expansion that continued through most of the Roosevelt years (and the sharp contraction of the 1937 recession that interrupted it). According to Christina Romer, the money supply growth caused by huge gold inflows was a crucial source of the recovery of the United States economy, and that fiscal policy and World War II were of little help.

Of course, it depends on who you ask.

It seems an awful big coincidence though, that the recover really hit full swing with WW II, don't you think?

either way, massive government spending ended it.

Massive spending on arms or public works projects, take your pick.


Either theory blows out of the water, the rightwing asertion that governmnet spending made things worse.

Actually it didn't end until after WW2 when spending was cut and taxes were cut. War-time spending certainly didn't get us out, because that's always destructive to the economy.

 

[Toro]

Actually it didn't end until after WW2 when spending was cut and taxes were cut. War-time spending certainly didn't get us out, because that's always destructive to the economy.

This is incorrect.

If the government significantly increases demand to go blow things up over there, then the war is stimulative to the domestic economy. It is bad for over there but it is good for right here.

For example, corporate profits hit a multi-decade high in 1918 and were not surpassed until the 1950s.

 

[Kevin_Kennedy]

Actually it didn't end until after WW2 when spending was cut and taxes were cut. War-time spending certainly didn't get us out, because that's always destructive to the economy.

This is incorrect.

If the government significantly increases demand to go blow things up over there, then the war is stimulative to the domestic economy. It is bad for over there but it is good for right here.

For example, corporate profits hit a multi-decade high in 1918 and were not surpassed until the 1950s.

A majority of production moving into supplying instruments of war is not helpful to the economy at home, because the only demand is from the military and not any domestic sources. Furthermore, the money spent on the war was taken from the citizens through taxation and inflation, which of course takes us to Bastiat's "What is seen and unseen."

 

[elvis]

I am going to make the statement that Japan ended the Depression. I would like your opinions on the statement.