The Great Depression - why did it end?

[Truthmatters]

Year Unemployment rate
1923-29............. 3.3

1930............. 3.3

1931............. 15.9

1932 ............. 23.6

1933 ............ 24.9 FDR takes office

1934 ........... 21.7

1935 .......... 20.1

1936 .......... 17.0

1937........... 14.3

1938........... 19.0

1939 .......... 17.2

1940.......... 14.6

1941 ........... 9.9

1942 ........... 4.7

But, SHE DOESN'T GET IT! FDR takes office, unemployment soars. Even by '42, a year after US enters war; 3 years after production of war related goods started, unemployment is STILL HIGHER than when he took office! That's with hundreds of thousands of young men unavailable to work!



Now Annie it did NOT saor while he was in office did it?

FDR had to ahlt the stimulus in 1937 because of budgeting rules. The economy tanked and he had to reinstate the stimulus the next year. The eonomy began to recover once more and then WWII started which finished the job. BTW WWII spending was also government spending just like the stimulus.

Government spending ended the great depression by all peoples estimations, Hack jsut wont admitt it.

 

[Toro]

I think Said1's authors were at least partially correct. Raising the reserve ratio is tightening, akin to raising interest rates. Couple that with raising taxes and cutting spending and it is no surprise the economy fell off a cliff again.

 

[DiveCon]

the new Deal worked.

It got the ecnonly moving and effected unemployment numbers.

It kept people alive folks.

looks to me like the war fixed it.......

Then why were we recovering before we entered the war in 1941?

uh, we didnt really enter the war officially till 42, but do you not know what was going on in the lead up?
did you forget about the lend/lease project?

 

[Truthmatters]

I think Said1's authors were at least partially correct. Raising the reserve ratio is tightening, akin to raising interest rates. Couple that with raising taxes and cutting spending and it is no surprise the economy fell off a cliff again.

The info she gave me attempted to say the stimulus was not working.

That I think was why she posted it.

 

[mash107]

Seems like the New Deal wasn't big enough

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.

Nope. Failing to obey the gold standard following WWI and the booming 1920s is what precipitated into a leveraged up stock market that inevitably had to collapse, much similar to the NASDAQ crash. Do you honestly believe we followed the gold standard throughout the largest war seen in the history of mankind, up to that point?

Regardless, the insolvency of the banks are a natural phenomenon of fractional reserve banking. Unless the reserve ratio is 100%, the bank, by definition, is insolvent. This was the case during the GD, and that's why the banks failed, in the same exact way banks are failing now.

 

[del]

the new Deal worked.

It got the ecnonly moving and effected unemployment numbers.

It kept people alive folks.

try breathing into a paper bag.

"ecnonly"?

 

[Toro]

I think Said1's authors were at least partially correct. Raising the reserve ratio is tightening, akin to raising interest rates. Couple that with raising taxes and cutting spending and it is no surprise the economy fell off a cliff again.

The info she gave me attempted to say the stimulus was not working.

That I think was why she posted it.

I missed that inference.

What I do know is that most economists whom I have ever read on this subject attribute slashing spending and raising taxes was the cause of the 1937 recession, which is certainly consistent with economic theory as a tightening of fiscal policy would have slowed the economy. However raising the reserve ratio would have also contributed to a slowdown given that is a tightening of monetary policy.

Tighten fiscal AND monetary policy when the economy was coming out of the Great Depression and its no wonder the economy swooned again.

There is no way in hell they'd do that today. In fact, they are doing the exact opposite as both monetary and fiscal policy are extremely loose, as they should be.

 

[Chris]

Seems like the New Deal wasn't big enough

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.

Nope. Failing to obey the gold standard following WWI and the booming 1920s is what precipitated into a leveraged up stock market that inevitably had to collapse, much similar to the NASDAQ crash. Do you honestly believe we followed the gold standard throughout the largest war seen in the history of mankind, up to that point?

Regardless, the insolvency of the banks are a natural phenomenon of fractional reserve banking. Unless the reserve ratio is 100%, the bank, by definition, is insolvent. This was the case during the GD, and that's why the banks failed, in the same exact way banks are failing now.

No, that is not it exactly.

The banks failed because there was no FDIC.

The stock market failed because of leveraged buying, the same thing that happened this time with the derivatives.

The lack of regulation caused the collapse in 1929, and the problems we have now.

The absence of government is anarchy.

 

[Toro]

Regardless, the insolvency of the banks are a natural phenomenon of fractional reserve banking. Unless the reserve ratio is 100%, the bank, by definition, is insolvent. This was the case during the GD, and that's why the banks failed, in the same exact way banks are failing now.

A reserve ratio of 100% is not by definition insolvency. Insolvency is when the value of the liabilities is greater than the value of the assets of the bank, or if a bank (or any company) cannot meet its cash flow obligations when they are due.

 

[DiveCon]

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.

Nope. Failing to obey the gold standard following WWI and the booming 1920s is what precipitated into a leveraged up stock market that inevitably had to collapse, much similar to the NASDAQ crash. Do you honestly believe we followed the gold standard throughout the largest war seen in the history of mankind, up to that point?

Regardless, the insolvency of the banks are a natural phenomenon of fractional reserve banking. Unless the reserve ratio is 100%, the bank, by definition, is insolvent. This was the case during the GD, and that's why the banks failed, in the same exact way banks are failing now.

No, that is not it exactly.

The banks failed because there was no FDIC.

The stock market failed because of leveraged buying, the same thing that happened this time with the derivatives.

The lack of regulation caused the collapse in 1929, and the problems we have now.

The absence of government is anarchy.

wrong, the crash of 29 was because no one had faith that their money was safe in the banks
and the fact that you only had to have 10% to purchase stocks so when the drop happened, they could not meet the margin call

 

[Truthmatters]

Why Not the Gold Standard?

 

[DiveCon]

Regardless, the insolvency of the banks are a natural phenomenon of fractional reserve banking. Unless the reserve ratio is 100%, the bank, by definition, is insolvent. This was the case during the GD, and that's why the banks failed, in the same exact way banks are failing now.

A reserve ratio of 100% is not by definition insolvency. Insolvency is when the value of the liabilities is greater than the value of the assets of the bank, or if a bank (or any company) cannot meet its cash flow obligations when they are due.

exactly

 

[Toro]

Why Not the Gold Standard?

I think the gold standard would be a disaster.

However, the current fiat system is also a disaster, but hey...

 

[mash107]

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.

Nope. Failing to obey the gold standard following WWI and the booming 1920s is what precipitated into a leveraged up stock market that inevitably had to collapse, much similar to the NASDAQ crash. Do you honestly believe we followed the gold standard throughout the largest war seen in the history of mankind, up to that point?

Regardless, the insolvency of the banks are a natural phenomenon of fractional reserve banking. Unless the reserve ratio is 100%, the bank, by definition, is insolvent. This was the case during the GD, and that's why the banks failed, in the same exact way banks are failing now.

No, that is not it exactly.

The banks failed because there was no FDIC.

The stock market failed because of leveraged buying, the same thing that happened this time with the derivatives.

The lack of regulation caused the collapse in 1929, and the problems we have now.

The absence of government is anarchy.

The complete control of government, as you advocate, in our affairs is called fascism. Our government should follow and abide by the Constitution which makes only gold and silver legal tender.

Do you honestly feel your money is safe with the head of the FDIC, Sheila Bear, saying that her agency will be insolvent sometime soon? I know that they have access to the printing press at the Fed, but when money is devalued to the point where $100,000 can't buy a loaf of bread, what good is the insurance?

Bloomberg.com: News

 

[glockmail]

...


The Great Depression - for what reasons did it end?

It ended because there was a market for our goods in Britain due to the war in Europe: ships, planes, vehicles, fuel, food.

 

[Said1]

I think Said1's authors were at least partially correct. Raising the reserve ratio is tightening, akin to raising interest rates. Couple that with raising taxes and cutting spending and it is no surprise the economy fell off a cliff again.

The info she gave me attempted to say the stimulus was not working.

That I think was why she posted it.

You only read one sentence and, if you recall, I posted it to back up what I originally posted.

 

[Said1]

I think Said1's authors were at least partially correct. Raising the reserve ratio is tightening, akin to raising interest rates. Couple that with raising taxes and cutting spending and it is no surprise the economy fell off a cliff again.

The info she gave me attempted to say the stimulus was not working.

That I think was why she posted it.

I missed that inference.

What I do know is that most economists whom I have ever read on this subject attribute slashing spending and raising taxes was the cause of the 1937 recession, which is certainly consistent with economic theory as a tightening of fiscal policy would have slowed the economy. However raising the reserve ratio would have also contributed to a slowdown given that is a tightening of monetary policy.

Tighten fiscal AND monetary policy when the economy was coming out of the Great Depression and its no wonder the economy swooned again.

There is no way in hell they'd do that today. In fact, they are doing the exact opposite as both monetary and fiscal policy are extremely loose, as they should be.

I made no mention of FDR, just the reserve ratio. I think it was the biggest detriment at that time - 1937.

 

[Truthmatters]

"The new deal hindered recovery" is right in the second paragraph you sent me to.

I never said you said it, I said your link did and I thought that is why you posted it.

 

[Said1]

"The new deal hindered recovery" is right in the second paragraph you sent me to.

I never said you said it, I said your link did and I thought that is why you posted it.

Had you read a tad further, you would have noted that they write about placing all the blame on FDR as being unfair, in 1937. Instead, you chose to quibble about credibility. without reading further. Anyway, I'm not convinced you really understand the point I was trying to make since you continue to harp on something that has nothing to do with what i originally said.

Either way, Toro nailed it pretty good, no need to continue with you.

 

[LiveUninhibited]

Year Unemployment rate
1923-29............. 3.3

1930............. 3.3

1931............. 15.9

1932 ............. 23.6

1933 ............ 24.9

1934 ........... 21.7

1935 .......... 20.1

1936 .......... 17.0

1937........... 14.3

1938........... 19.0

1939 .......... 17.2

1940.......... 14.6

1941 ........... 9.9

1942 ........... 4.7

whitch just like the last time you posted it, doesnt prove your point, it proves everyone elses

But, SHE DOESN'T GET IT! FDR takes office, unemployment soars. Even by '42, a year after US enters war; 3 years after production of war related goods started, unemployment is STILL HIGHER than when he took office! That's with hundreds of thousands of young men unavailable to work!

That's not what I see in those stats. FDR took office at the peak of unemployment, in 1933, at almost 25%. Things improved from there, for whatever reason, until 1938, but unemployment did not become normal again until around 1942. Keep in mind that I am undecided on this issue.

So what country and in what era (doesn't have to be the 30s), handled a depression the best?