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View Diary: POTUS and Rep. Pelosi Announce Plans to Win Back the House (317 comments)

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  •  Krugman says 2 trillion might not have been enough (3+ / 0-)
    Recommended by:
    Onomastic, aitchdee, JoanMar

    Nobody really knows what would have been "enough", and nobody has really defined what "enough" means.

    For the sake of argument, let's say that "enough" means getting down to 4.5% unemployment within 4 years.  Krugman has stated that even if we had gotten a two trillion dollar stimulus, it still might not have been enough.  He said that he thinks that it would have knocked 0.5 percentage points off the unemployment rate, but he can't guarantee that it would have done much more than that, let alone a 100% recovery in a reasonably short time period (as I said, I'm using 4 years as the time period).

    FDR's New Deal definitely wasn't enough to end the Great Depression in 4 years, or even get unemployment down to single digits (didn't even come close).  The New Deal only got unemployment to come down to 14% (and many of the jobs were make work at barely livable wages), then FDR embraced FULL austerity (not just decreasing payments of a particular program in the long term, but full, honest-to-goodness David Cameron style austerity, (mis)designed to boost the economy in the short term through massive short term cuts) which led to the Roosevelt Recession in 1937/38, which was the greatest economic slowdown in history (including the slowdown during Hoover's time that started the Great Depression).  Why do I bring this up?  Just to point out that often the programs put in place are "not enough" and that not even FDR was perfect at the stimulus game.

    •  That's why it's important to have a political club (1+ / 0-)
      Recommended by:
      Roger Fox

      to hit the opposition with -- an "I told you what would work and you refused to do it" club.

    •  9.1% unemployment in 1937, not 14.3% (0+ / 0-)

      You might want to count the CCC & WPA jobs, which 14.3% doesnt.

      Stanley Lebergott unemployment numbers never counted CCC & WPA jobs.

      Smiley, Gene, "Recent Unemployment Rate Estimates for the 1920s and 1930s", Journal of Economic History, June 1983, 43, 487–93.

      .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Sat Jun 08, 2013 at 11:41:36 AM PDT

      [ Parent ]

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