Barack Obama accused of making 'Depression' mistakes

[bijou]

Barack Obama is committing the same mistakes made by policymakers during the Great Depression, according to a new study endorsed by Nobel laureate James Buchanan. His policies even have the potential to consign the US to a similar fate as Argentina, which suffered a painful and humiliating slide from first to Third World status last century, the paper says.

There are "troubling similarities" between the US President's actions since taking office and those which in the 1930s sent the US and much of the world spiralling into the worst economic collapse in recorded history, says the new pamphlet, published by the Institute of Economic Affairs.

In particular, the authors, economists Charles Rowley of George Mason University and Nathanael Smith of the Locke Institute, claim that the White House's plans to pour hundreds of billions of dollars of cash into the economy will undermine it in the long run. They say that by employing deficit spending and increased state intervention President Obama will ultimately hamper the long-term growth potential of the US economy and may risk delaying full economic recovery by several years.

The study represents a challenge to the widely held view that Keynesian fiscal policies helped the US recover from the Depression which started in the early 1930s. The authors say: "[Franklin D Roosevelt's] interventionist policies and draconian tax increases delayed full economic recovery by several years by exacerbating a climate of pessimistic expectations that drove down private capital formation and household consumption to unprecedented lows." ...

http://www.telegraph.co.uk/finance/economics/6147211/Barack-Obama-accused-of-making-Depression-mistakes.html

[thundley4]

The study represents a challenge to the widely held view that Keynesian fiscal policies helped the US recover from the Depression which started in the early 1930s.

Even before the "Porkulous Spending Bill" was was passed, there were economists saying that it was a mistake. Many believed that US actions helped to prolong and exacerbate the Great Depression. Other countries are recovering from this recession, but the ones that went in for big deficit spending are lagging behind.

[RightCoast]

Of course, since this is what barack wants he's not too upset by the criticism.

[franksolich]

Even before the "Porkulous Spending Bill" was was passed, there were economists saying that it was a mistake. Many believed that US actions helped to prolong and exacerbate the Great Depression. Other countries are recovering from this recession, but the ones that went in for big deficit spending are lagging behind.

An interesting comparison should be made between the recovery from the Great Depression, in Britain and France during the 1930s, and the United States during the 1930s.

Both Britain and France emerged from the devastation a great deal sooner than the United States.  Remember that 1937 was one of the worst years in the United States, and that unemployment was consistently high until 1940-1941, making the Great Depression a ten-year+ phenomenon here.

The difference was that Britain and France did practically nothing, other than increasing the weekly unemployment sixpence or a few centimes, allowing their economies to correct themselves.  And the United States embarked upon all sorts of coerced "corrective" measures for the problem here.

I still think that if all had been left alone, we would be well on our way to recovery.

[Peter3_1]

Exactly the same Mistakes as FDR, it is not an accusation, but a freely admited by Barry FACT. Things will not get better quickly untill they STOP throwing fake money around.

[Alpha Mare]

Anyone else read "The Forgotten Man"?