The Great Depression - why did it end?

Discussion in 'Education' started by SpidermanTuba, Mar 8, 2009.

  1. SpidermanTuba
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    I guess technically this is history, but its so relevant to now I thought it best here.


    Now that we're already into this recession, there's no point to playing the blame game any more. Especially when there is plenty of blame to be heaped on both sides.

    The real question now, is how do we fix it?

    Let's look to history.


    The Great Depression - for what reasons did it end?
     
  2. Midnight Marauder
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    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.
     
  3. Gunny
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    Gunny Gold Member

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    A better question ... Why is something from the 1930s posted in Current Events?
     
  4. Gunny
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    WWII ended it. The mobilizing of US industry and sudden employment of any man between the age of 18-45 was a hit of speed on the economy.
     
  5. SpidermanTuba
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    It seems an awful big coincidence though, that the recover really hit full swing with WW II, don't you think?
     
  6. Midnight Marauder
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    Because most of the brain-dead public at large has drank the kool-aid that today's economic situation is somehow analogous to the depression of the 30s. It's not.

    It's the Goebbels factor: say it loud enough and long enough and gullible people will just accept it as fact.
     
  7. SpidermanTuba
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    Wasn't the employment of everyone 18-45 caused by a draft which was funded by massive government spending?


    What if the government today said, everyone who is between 18 and 45, who doesn't have a job, can come work for the government, and that went on for 4 years? Would that help?

    Seems like the New Deal wasn't big enough. They weren't prepared to employ EVERYBODY. WW II did employ all men in those ages - which must have been at least 35% of the workforce. Since unemployment wasn't at 35% this meant immediate full employment for anyone who wanted work, women, older men, and those unfit for military service.
     
  8. Midnight Marauder
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    It was largely irrelevant, as was WW2. The gold standard caused the problem and getting rid of it solved the problem. FDR's policies actually extended the depression 7-8 years.
     
  9. SpidermanTuba
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    How is it not? Wasn't one of the biggest contributors to the depression massive land speculation and bank failures? Didn't the nation experience a huge stock market failure, massive unemployment, and a sharp contraction in the GDP?

    If you break your leg in a car accident, and then break the other one 10 years later tumbling down a flight of stairs - isn't the treatment for your leg going to be just about the same even though the causes are very different?
     
  10. Midnight Marauder
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    Today's economic issues and those of the 30s are two totally separate things, with separate causes, and will have separate cures. And the US economy and the world's as well aren't anywhere near as bad as the 30s. Think back only to 1977, for an analogue of today.

    To fix your analogy for you, the 30s was a broken spine, today is a hang nail.
     

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