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Re: [Phys-l] frizzi


On 2011, Aug 19, , at 21:09, William Robertson wrote:

There has to be a rebound when the
funds run out, and then the government has to spend even more money.
The only way out of that is to spend even more money, and eventually,
you have to come out of the hole you have dug. FDR gets much credit
for having saved the country, but there are plenty of economic
scholars who believe that FDR only prolonged the depression with his
massive government spending.



In Econ I, learned that FDR didn't spend enuff**. It was the spending for WW II that did it. This is the argument of the "The Report from Iron Mountain".


Not incidentally, I remember the Prof. pointing out that Hoover spent more in his last few months than FDR did in his first year. Also, another point is the effect of the spending in addition to its stimulus effect.

http://en.wikipedia.org/wiki/The_Report_from_Iron_Mountain

bc has a first edition.

p.s. Of course, the prof may have been a Keynesian.

And most of the spending was to ensure liquidity -- banks trust each other to lend to each other and keep issuing commercial paper, i.e. lend to large firms. On that score we're much better of than in '08/9.


A prediction one may now test:

http://minnesotaindependent.com/12230/mnindy-audio-doug-henwood-on-the-bailout-the-d-word-and-the-great-panic-of-08


Moer opinion:

Consider, for example, the Great Depression, and the monetary stimulus that economists from Milton Friedman on the right to Christina Romer on the left now agree ended it.

http://thinkprogress.org/yglesias/2011/08/18/299356/to-save-the-economy-you-sometimes-need-to-ignore-business/