How austerity cured a depression

22 Jan 2012 18:03 #1 by Blazer Bob
You are entitled to your own opinion but not your own set of facts.

I did not look but I am pretty certain that some would venomously dispute the below.

Don't know who is right , but after so many years I find it odd.


By James Grant, Published: January 20

"Our Great Recession ended 2½ years ago, according to the official cyclical timekeepers, but you wouldn't know it by a glance at the news. Zero percent interest rates and $1 trillion in "stimulus" notwithstanding, the U.S. economy can hardly seem to heave itself out of bed in the morning. Now compare this with the first full year of recovery from the ugly depression of 1920-21. In 1922, under the unsung stewardship of the president best remembered for his underlings' scandals and his own early death in office, the unemployment rate fell from 15.6 percent to 9 percent (on its way to 3.2 percent in 1923), while constant-dollar output leapt by 16 percent. After which the 1920s proverbially roared.

And how did the administration of Warren G. Harding, in conjunction with the Federal Reserve, produce these astonishing results? Why, by raising interest rates, reducing the public debt and balancing the federal budget. Let 21st-century economists rub their eyes in disbelief. Eighteen months after the depression started, it ended.............

http://www.washingtonpost.com/opinions/ ... print.html

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22 Jan 2012 18:44 #2 by FredHayek
And sometimes economies come back on their own, which could be what happened with Harding. Europe was rebounding from ww1, etc.

Thomas Sowell: There are no solutions, just trade-offs.

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