Originally Posted by BeAChooser
For example, just look at the recession in the early 80's.
Why? The causes of the two recessions have little in common. The recent recession was caused by a near collapse of the banking system.
So what? I'd say regardless of the cause, the fact that both causes created 10% plus unemployment and put the economy in a slump means they have more than a little in common. The solution to getting them out of that slump and getting people employed again is probably the same. Reagan REALLY stimulated the economy (leading to, as I noted, quarter after quarter after quarter of very high GNP growth … which means jobs, jobs, jobs). He did it by cutting taxes and spending, not by taking money from working people and giving it to others to mow lawns and repave perfectly good streets, after the government takes it cut, of course. The result of what Obama is doing is quite predictable, lomiller, if you pay attention to history and don't let yourself be blinded by socialist ideology.
The best comparisons to that are the 1929 collapse and the Japanese real-estate bubble popping in the late 80’s.
In both those cases the government tried massive intervention and in both those cases accomplished very little other than to prolong the downturn. It took a World War to end the Great Depression and the Japanese economy took two decades to show signs of recover. But note, similar downturns earlier in American history were treated differently with far different results.
The Depression of 1837 saw 4 million (or more) people lose their jobs (which was a lot back then) and out of 850 banks in the US, 405 failed or partially failed. Property values collapsed and it looked a lot like what democrats warned would happen if we didn't intervene in a massive way this time. But the President at that time, Van Buren, was philosophically opposed to government intervention and he did nothing. Even so, that depression was over in six years (less than the Great Depression) with the economy surging. That's also less time than some democrats are now suggesting this downturn will drag on despite trillions and trillions and trillions in spending.
Or look at the Depression of 1893 which happened under Grover Cleveland's watch. Again, the situation wasn't all that different from that in the 1930s. And again, because of Grover Cleveland being opposed to government intervention, the government did little to intervene. In fact, Cleveland cut taxes and spending. And again, that economic crisis was over within 6 years. And again compare that to the Great Depression and what Hoover and Roosevelt did … or what the Japanese did. Both introduced massive spending and what do you know ... one took 9 years (and the stimulus of a World War) to resolve and the Japanese call theirs "The Lost Decade". So you see, the argument can certainly be made that massive spending only lengthens/deepens recessions/depressions.
How about the recession of 1921? It was an extremely sharp deflationary recession following World War I. As I pointed out in those earlier threads, unemployment rose over 700% in just one year (to nearly 12%), production fell 23% and the stock market dropped 18%. Yet within two years, it was over and the economy was booming. What happened to make this possible? President Harding
cut government spending by 40%, instead of massively increasing it. Lower taxes and reduced regulation helped America's entrepreneurs and capital create jobs and push the economy to recover. Harding's free market policies (and then Calvin Coolidge's) led to the Roaring Twenties, known for technological advances, women's rights, the explosion of the middle class, and some of the most rapid economic growth in American history. All without a stimulus.
Then, in 1928, Herbert Hoover took over and started to undo what Coolidge had accomplished. He started a trade war, increased government spending substantially and raised tax rates across the board. In fact, he increased the top rate on personal income taxes from 25% to 63%. He doubled estate taxes. He raised corporate taxes by nearly 15%. And in doing so, turned a recession that began in 1929 into a depression.
The truth is that in example after example of recessions and depressions, one can see that cutting government spending (or at least not intervening) led to recovery. Look at the recessions/depressions in 1815, 1837, 1873, 1893, 1920, 1958 or 1979. In every one, the government cut spending and in every one of them the economy recovered much faster than it did on average, during the New Deal ... or now. The fact that you liberals won't acknowledge this is part of the problem we face now. Nothing is as deep as denial.
Oh, and BTW. Annualized US growth for the last 3 months of 2009 were 6.4%
Oh really? I have it on good authority it grew at only a 5.7% rate and that rate will drop substantially this year.
http://www.washingtonpost.com/wp-dyn/content/article/2010/01/29/AR2010012901694.html
The U.S. economy grew at a breakneck rate of 5.7 percent at the end of 2009, the government said Friday … But economists cautioned that such a pace will probably not persist and that the economy will grow at a more measured rate in the coming months.
http://thehill.com/homenews/administration/78679-gdp-grows-57-percent-in-fourth-quarter
The U.S. economy grew at 5.7 percent in the fourth quarter of 2009, stoking hopes for an economic recovery.
http://www.foxnews.com/politics/2010/01/29/economy-grows-percent-th-quarter/
The 5.7 percent annual growth rate in the fourth quarter was the fastest pace since 2003. … snip … Still, economists expect growth to slow this year as companies finish restocking inventories and as government stimulus efforts fade. Many estimate the nation's gross domestic product will grow about 2.5 percent to 3 percent in the current quarter and about 2.5 percent or below this year.
http://www.tradingeconomics.com/Economics/GDP-Growth.aspx?Symbol=USD
In the fourth quarter of 2009, the United States economy expanded at an annualized rate of 5.7% giving the impression that the recovery in world’s largest economy has been stronger than expected. Yet, growth was mainly due to inventory rebuilding and the recent economic expansion maybe short lived.
