Let's see, in the past 8 years, we have had tax reductions, two wars,
and huge increasing budget deficits. Who among you is going to say with
a straight face we have not had a huge fiscal stimulus? The stimulus
worked great for 6 and 1/2 years until we all realized the stimulus had
gone into building homes for people who can't afford them. So as we
deal with the hangover of the last stimulus and stumble toward
rationality, Nobel winner Paul Krugman is arguing that the solution to
our difficulties is a bigger fiscal stimulus? The problem with
Bushonomics was that we did not have enough tax reductions, wars and
budget deficits? You all realize this is insane, don't you?
>
> David Shemano
---
Shamano, your email software is all fucked up. When I hit reply, the
right margin went off into the stratosphere. Ordinarily, I don't reply
to malformed messages, but I did think it was worth answering your
libertarian nonsense so I reformatted it above.
To get straight to the point (and I might even work this into a book on
FDR), the American economy was in an expansionary phase up until the
1970s even if it was faced by temporary dislocations like the Great
Depression.
Auto, steel, armaments, etc. were all growth industries. Today there is
nothing that has replaced them. There has been a desperate search since
the 1970s to inflate (not in a fiscal sense) the American economy but
nothing has been able to provide the kind of job growth that the
smokestack industries once did except for high technology but that has
evaporated as well.
That is the main reason there have been bubbles after bubbles in recent
decades. Capitalism might have experienced a greater shock in 1929 than
it has today in terms of GDP reduction, unemployment, etc. but it faces
much worse long-term prospects today. That is a contradiction that even
many Marxists have failed to grasp.
Libertarian panglosses like yourself of course are living in your own
bubble, so I assume that this will be lost on you.
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