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View Diary: The Great Depression Pt. IV (187 comments)

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  •  1930sStimulus Worked for England Germany & Japan (17+ / 0-)

    The problems with Americans is we know little history and even less geography and even less when you combine the two.  

    The best evidence of the success of fiscal stimulus in the 1930s is how well it worked overseas.

    Japan was actually the first nation to implement what would soon be called "Keynesian Economics".  In 1932 the MoF (Minister of Finance) Implemented deficit spending (the spending went to munitions).  By 1933 Japan was out of the depression.  

    Germany is a more famous case. It implemented deficit spending in 1933. By 1934 it was out of the depression.  

    England implemented deficit spending in 1934 and was out of the depression by 1935.  

    The case of Japan is profound. The MoF was figured that the deficits could be paid off during good years.  By 1934 there were signs of inflation, the economy now cured, he moved to reduce the deficit spending - which meant a cut back on armaments. Right wing military fanatics assassinated him. The affect was to keep the deficit spending in place and chilling affect on the civilian bureaucrats in the government.  As a result the Military increasingly came to dominate the government.  To counter act inflation, price controls were introduced, to limited effect. By 1939 Japan's industrial production had doubled - placing it in a position to where it felt it could stand up to the United States that was worried about fighting a war on two fronts.

    Deficit spending does work.  The problem is 30 years of supply side economics has gutted the demand side of the economy. This is just stupid policy that has prevailed based upon well funded propaganda - complete with its own news opperation.  There is no history of it work, and much history of it causing epic collapse, such as the Great Depression.

    Obama can tax the sh*t out of the wealthy and it won't hurt the economy one bit, and implement public spending to help generate demand while improving society's efficiency.

    •  The thing is... (1+ / 0-)
      Recommended by:
      The Wonder Moron

      If there is a major theme that Obama peppers every speech he makes with, it's history.  Never before have I heard a public officeholder reference the past so much.  Nearly every major address looks back before it looks forward, and that's a trait I'd imagine he hold for more than just good oratory.

      Thank goodness.

      "Every man is guilty of all the good he did not do." ~Voltaire

      by The BBQ Chicken Madness on Thu Jan 08, 2009 at 10:06:53 AM PST

      [ Parent ]

    •  And why should seventy million (0+ / 0-)

      older retirement people be further impoverished by inflation?

      Why not simply top-up their interest income?

      If a bank CD pays say 1.75%, have a 3.25% top-up paid by the Federal Reserve.

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