mostpost
09-03-2014, 05:40 PM
In the "Obamacare: Even better than we thought" thread, Clocker said this,
The Obama stimulus didn't work, and no Keynesian stimulus has ever worked.
Let's see if that is right or not.
We will start with the Great Depression of 1929; and we will include the Recession 0f 1937-38 because the two are intertwined.
The Great Depression began in 1929. That year GDP was $103.6B. Unemployment was 3.2%. Government spending was $9.4B Government spending went up slightly the following year but dropped to $8.7B by 1932 and 1933.
GDP fell to $52.4B by 1933 while unemployment soared to 24.9%. Then FDR took office and began a number of stimulus programs. The Civilian Conservation Corps put young people to work planting trees and preventing soil erosion. The Public Works Administration put people to work building schools and libraries. The Tennessee Valley Authority provided funds for private industry to build dams in the Tennessee Valley for electricity production and flood control. There were other programs where the government spent money to provide jobs directly or through private partners.
In 1934 expenditures rose to $10.5B. GDP rose to $66.8B, a 27% increase. Unemployment fell to 21.7%.
In 1935 expenditures rose to $10.9B. GDP rose to $73.3B, a 9.7% increase and unemployment fell again to 20.1%
It continues in that vein and by 1937 GDP is up to $91.9B. Unemployment dropped to 14.3%. But 1937 was the year when the deficit hawks gained power and spending dropped to $12.8B (from $13.1B the previous year.)
The effects of that were felt in 1938 when GDP fell to $86.1B and unemployment leaped up to 19.0%.
The Recession of 1937-38 began in May 1937. In April 1938 FDR proposed a $3.75B stimulus which was increased to $5B and passed. In June 1938 the recession ended. In 1939 GDP was up to $92.9B and unemployment down to 17.2%. About this time World War II began.
More later.
The Obama stimulus didn't work, and no Keynesian stimulus has ever worked.
Let's see if that is right or not.
We will start with the Great Depression of 1929; and we will include the Recession 0f 1937-38 because the two are intertwined.
The Great Depression began in 1929. That year GDP was $103.6B. Unemployment was 3.2%. Government spending was $9.4B Government spending went up slightly the following year but dropped to $8.7B by 1932 and 1933.
GDP fell to $52.4B by 1933 while unemployment soared to 24.9%. Then FDR took office and began a number of stimulus programs. The Civilian Conservation Corps put young people to work planting trees and preventing soil erosion. The Public Works Administration put people to work building schools and libraries. The Tennessee Valley Authority provided funds for private industry to build dams in the Tennessee Valley for electricity production and flood control. There were other programs where the government spent money to provide jobs directly or through private partners.
In 1934 expenditures rose to $10.5B. GDP rose to $66.8B, a 27% increase. Unemployment fell to 21.7%.
In 1935 expenditures rose to $10.9B. GDP rose to $73.3B, a 9.7% increase and unemployment fell again to 20.1%
It continues in that vein and by 1937 GDP is up to $91.9B. Unemployment dropped to 14.3%. But 1937 was the year when the deficit hawks gained power and spending dropped to $12.8B (from $13.1B the previous year.)
The effects of that were felt in 1938 when GDP fell to $86.1B and unemployment leaped up to 19.0%.
The Recession of 1937-38 began in May 1937. In April 1938 FDR proposed a $3.75B stimulus which was increased to $5B and passed. In June 1938 the recession ended. In 1939 GDP was up to $92.9B and unemployment down to 17.2%. About this time World War II began.
More later.