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The Stimulus Saved Us From Depression

  • bigmanbt
    I think we were saying the same thing at the start Foot, my "in times of need" are the same as your "national emergency". I agree with you about the 50's and so on.

    Only thing I will say about just cutting the government is that, no it won't provide the total fix, but it's a major start in the right direction. There are other issues involved that we have to deal with in respect to outsourcing. But lowering the tax rate allows for more small businesses which would also help employment figures.
  • Writerbuckeye
    I will say this though. FDR's social policies did in fact kick start the ailing economy. Look it up. Unemployment dropped by appx 40%.
    Huh?

    Not even close to the truth.

    From an American Thinker article...

    "Amity Schlaes' excellent book The Forgotten Man brought significant attention to the failure of the New Deal to cure America's economic ills during the Depression. Now, another timely book has appeared, the culmination of ten years of research, which undertakes a meticulous analysis of the results of FDR's New Deal. In New Deal or Raw Deal? (Threshold Editions, 2008), Burton Folsom, Jr., a professor of history at Hillsdale College and senior historian at the Foundation for Economic Education, asks the decisive question: "But did it work?" The answer, to put it briefly, is "not really."

    Folsom begins the book by revealing a startling confession by Henry Morgenthau, secretary of the Treasury, and a close personal confidante of Roosevelt. On May 9, 1939, Morgenthau told the House Ways and Means Committee:

    "We have tried spending money. We are spending more than we have ever spent before and it does not work. ... We have never made good on our promises ... I say after eight years of this Administration we have just as much unemployment as when we started. .... And an enormous debt to boot!"


    Morgenthau's frustration was understandable: in April 1939, unemployment was over 20 percent. This was nearly a decade after the 1929 crash and more than 6 years after FDR's inauguration.

    http://www.americanthinker.com/2009/02/imitating_failure.html
  • ptown_trojans_1
    Note: AmericanThinker is a largely conservative site. Not disputing the information, but important when reading the article.
  • jhay78
    ^^The important thing from that article is the quote from FDR's Treasury secretary (in bold), not the site where the article appears.
  • BoatShoes
    jhay78 wrote: ^^The important thing from that article is the quote from FDR's Treasury secretary (in bold), not the site where the article appears.
    It's also important to note that as part of Roosevelt's economic policy he raised tax rates and tried to balance the budget which would counter the effects of increased spending and Keynes disagreed with Roosevelt quite often. It wasn't until WWII when Roosevelt spent as much as Keynes would have liked.

    In fact, it's been suggested that the stimulus methods being undertaken by the Obama administration are Keynes' first real test. I've provided a link to NPR which suggested this.

    Article on Keynes

    It's important to note that Morgenthau was a classical economist and an opponent of Keynesianism. He wanted to try and balance the budget in 1937, the "depression within the depression"

    So if we're going to pin FDR down with prolonging the depression, we're going to have to criticize that administration for half assing it and not going all in with Keynes nor classical economics.
  • BoatShoes
    We have to keep in mind that Classical Economists want a balanced budget...tax increases to do so are justified. Keynes disagrees and believes that monetary and fiscal policy can be used to counter the effects of the business cycle....curbing inflation with raises in taxes and decreases in government spending in boom times and government spending in recessions.

    He said that governments should fix the problems in the short run rather than let the markets solve the problems in the long run because, "in the long run, we're all dead."
  • ptown_trojans_1
    jhay78 wrote: ^^The important thing from that article is the quote from FDR's Treasury secretary (in bold), not the site where the article appears.
    Again, not disputing the facts, just saying it is important to know fully where the article is coming from to get a full perspective. Same goes for the New York Times, Wall Street Journal, Huffington Post, Fox News, etc.
  • Bigdogg
    I am not sure why some of you people are all hung up on the 10% unemployment number. That was never the primary goal of the stimulus package. As I stated previously, the stimulus package was designed to prime the pump to get the economy moving forward. I am not a big fan of spending money we do not have. I felt this was an acceptable solution to a once in my lifetime event. History will be the judge if this was the right move. Right now I support what the current administration has done regarding the stimulus package.

    With that being said, the Obama administration has made lots of decisions I do not agree with.

    Here is the latest numbers on the stimulus program by different sources.

    http://www.politifact.com/truth-o-meter/article/2010/feb/17/stimulus-report-card/
  • Footwedge
    Writerbuckeye wrote:
    I will say this though. FDR's social policies did in fact kick start the ailing economy. Look it up. Unemployment dropped by appx 40%.
    Huh?

    Not even close to the truth.

    From an American Thinker article...

    "Amity Schlaes' excellent book The Forgotten Man brought significant attention to the failure of the New Deal to cure America's economic ills during the Depression. Now, another timely book has appeared, the culmination of ten years of research, which undertakes a meticulous analysis of the results of FDR's New Deal. In New Deal or Raw Deal? (Threshold Editions, 2008), Burton Folsom, Jr., a professor of history at Hillsdale College and senior historian at the Foundation for Economic Education, asks the decisive question: "But did it work?" The answer, to put it briefly, is "not really."

    Folsom begins the book by revealing a startling confession by Henry Morgenthau, secretary of the Treasury, and a close personal confidante of Roosevelt. On May 9, 1939, Morgenthau told the House Ways and Means Committee:

    "We have tried spending money. We are spending more than we have ever spent before and it does not work. ... We have never made good on our promises ... I say after eight years of this Administration we have just as much unemployment as when we started. .... And an enormous debt to boot!"


    Morgenthau's frustration was understandable: in April 1939, unemployment was over 20 percent. This was nearly a decade after the 1929 crash and more than 6 years after FDR's inauguration.

    http://www.americanthinker.com/2009/02/imitating_failure.html
    The New Deal was passed in 1933. Not all of the measures leveled worked out. But for you to say the unemployment wasn't drastically reduced. is sheer disengeneousness.

    Government spending always reduces enemployment. Always. At least for the short term. Are their deleterious effects from using it? Absolutely.

    From WikiAnswers...showing an overall reduction of unemployment approximately 40% as I cited above....

    Look at 1933 through 1939.

    http://wiki.answers.com/Q/What_was_the_US_unemployment_rate_in_1930
  • fish82
    Bigdogg wrote: I am not sure why some of you people are all hung up on the 10% unemployment number. That was never the primary goal of the stimulus package. As I stated previously, the stimulus package was designed to prime the pump to get the economy moving forward. I am not a big fan of spending money we do not have. I felt this was an acceptable solution to a once in my lifetime event. History will be the judge if this was the right move. Right now I support what the current administration has done regarding the stimulus package.

    With that being said, the Obama administration has made lots of decisions I do not agree with.

    Here is the latest numbers on the stimulus program by different sources.

    http://www.politifact.com/truth-o-meter/article/2010/feb/17/stimulus-report-card/
    Whether it was the "primary goal" or not, he 100% sold it on the "keeping unemployment under 8%" shtick. That's not disputable.
  • Bigdogg
    fish82 wrote:
    Bigdogg wrote: I am not sure why some of you people are all hung up on the 10% unemployment number. That was never the primary goal of the stimulus package. As I stated previously, the stimulus package was designed to prime the pump to get the economy moving forward. I am not a big fan of spending money we do not have. I felt this was an acceptable solution to a once in my lifetime event. History will be the judge if this was the right move. Right now I support what the current administration has done regarding the stimulus package.

    With that being said, the Obama administration has made lots of decisions I do not agree with.

    Here is the latest numbers on the stimulus program by different sources.

    http://www.politifact.com/truth-o-meter/article/2010/feb/17/stimulus-report-card/
    Whether it was the "primary goal" or not, he 100% sold it on the "keeping unemployment under 8%" shtick. That's not disputable.
    You are wrong and insist on continuing to miss characterize what were projections. You need to start reading more and watching less Fox. The 8% has been debunked long ago. Move on.

    http://www.politifact.com/truth-o-meter/statements/2009/jul/09/eric-cantor/Cantor-and-other-republicans-say-obama-promised-s/
  • fish82
    Bigdogg wrote:
    fish82 wrote:
    Bigdogg wrote: I am not sure why some of you people are all hung up on the 10% unemployment number. That was never the primary goal of the stimulus package. As I stated previously, the stimulus package was designed to prime the pump to get the economy moving forward. I am not a big fan of spending money we do not have. I felt this was an acceptable solution to a once in my lifetime event. History will be the judge if this was the right move. Right now I support what the current administration has done regarding the stimulus package.

    With that being said, the Obama administration has made lots of decisions I do not agree with.

    Here is the latest numbers on the stimulus program by different sources.

    http://www.politifact.com/truth-o-meter/article/2010/feb/17/stimulus-report-card/
    Whether it was the "primary goal" or not, he 100% sold it on the "keeping unemployment under 8%" shtick. That's not disputable.
    You are wrong and insist on continuing to miss characterize what were projections. You need to start reading more and watching less Fox. The 8% has been debunked long ago. Move on.

    http://www.politifact.com/truth-o-meter/statements/2009/jul/09/eric-cantor/Cantor-and-other-republicans-say-obama-promised-s/
    Where did I say it was a "promise?" He used the projection stated in your laughingly "debunking" article to sell that the bill be passed ASAP. Multiple members of the administration used that exact report to sell it on the Sunday talk shows for a month straight.

    That's what I said, and it's 100% accurate. Sorry if you can't grasp that. FYI....I don't watch FOX, but it was a nice attempt at a tired retort anyway.
  • Bigdogg
    fish82 wrote:
    Bigdogg wrote:
    fish82 wrote:
    Bigdogg wrote: I am not sure why some of you people are all hung up on the 10% unemployment number. That was never the primary goal of the stimulus package. As I stated previously, the stimulus package was designed to prime the pump to get the economy moving forward. I am not a big fan of spending money we do not have. I felt this was an acceptable solution to a once in my lifetime event. History will be the judge if this was the right move. Right now I support what the current administration has done regarding the stimulus package.

    With that being said, the Obama administration has made lots of decisions I do not agree with.

    Here is the latest numbers on the stimulus program by different sources.

    http://www.politifact.com/truth-o-meter/article/2010/feb/17/stimulus-report-card/
    Whether it was the "primary goal" or not, he 100% sold it on the "keeping unemployment under 8%" shtick. That's not disputable.
    You are wrong and insist on continuing to miss characterize what were projections. You need to start reading more and watching less Fox. The 8% has been debunked long ago. Move on.

    http://www.politifact.com/truth-o-meter/statements/2009/jul/09/eric-cantor/Cantor-and-other-republicans-say-obama-promised-s/
    Where did I say it was a "promise?" He used the projection stated in your laughingly "debunking" article to sell that the bill be passed ASAP. Multiple members of the administration used that exact report to sell it on the Sunday talk shows for a month straight.

    That's what I said, and it's 100% accurate. Sorry if you can't grasp that. FYI....I don't watch FOX, but it was a nice attempt at a tired retort anyway.
    Laughing debunking article? If you want to hold on to one small, irrelevant argument and declare yourself informed, go ahead. You are amusing yourself silly. Prove the sources wrong. What the hell dose it matter if he said it was 8 or 10 percent. The objective was to kick start the economy.
  • assumption
    jhay78 wrote:
    BoatShoes wrote:
    jhay78 wrote: Why is it still being called a "stimulus" program. Everyone knows it was the largest SPENDING bill ever, a credit card with no limit for Dems and their wish lists.

    The government cannot stimulate an economy or create jobs by spending money. You can't take money from the private sector (taxes) and create "jobs" and call it a stimulus.
    a third of of the stimulus bill was tax cuts...(yeah yeah, tax cuts are no good now in the eyes of conservatives anymore unless they are reductions in rate brackets across the board)...but the point remains that this guy, jhay, is just spouting political rhetoric and doesn't actually know anything about the bill. (much like most of our Congress when they voted for it).
    Adjusting the withholding tables does not = tax cuts.

    After Bush's tax cuts (you know, the real ones) were enacted, jobs were created for 52 consecutive months.

    THAT is a stimulus.
    Sez you! Facts please. 52 months? OReilly could use you in his no spin zone. Laughable.
  • queencitybuckeye
    Listed as true.
  • QuakerOats
    America’s Forgotten Depression... and Roaring Recovery!
    February 24, 2010 - 12:31 ET


    Ever hear of the Great Depression of 1920? No, me either. Do you know why? Because the recession that began shortly after World War I ended never deepened and never became “great” (as though any depression is great). There is a history lesson in that story that our leadership in Washington should keep in mind today.

    As the United States, and the world, came out of World War I, the economies of the warring powers had been cranked up to full production to meet wartime demands. Suddenly, in 1918, the Armistice was announced, and within a year, troops began returning to civilian life. The influx of millions of soldiers worldwide introduced sudden unemployment, and thousands of farmers came back to farms that were already at or near full capacity, causing farm prices to fall. In the United States, Woodrow Wilson’s hand-picked successor, James Cox, the newspaper magnate from Dayton, Ohio, ran on a platform of reducing America’s wartime debt through a policy of maintaining Wilson’s outrageously high wartime tax rates.

    The Progressive President Wilson had been in office when the Income Tax Amendment was passed—a story in itself. While the goal of the Progressives who favored an income tax was first and foremost wealth redistribution (not raising money to run the government), the income tax itself was largely sold to the American people on two major positive features. First, its rates were (by current standards) ridiculously low. Most people paid no income taxes at all, the bottom bracket paid only about 1%, and the very richest Americans paid only 6% (today, many states have higher income tax rates than that!). As a Vegas comedian would say, “What’s not to like?”

    But it only took Wilson a couple of years of war to jack up the top rates to an astounding 73% (near confiscation) and hike the bottom rate to 25%.

    Now for a little sidebar: how often have you heard that “World War II got us out of the Great Depression?” Probably more times than you can count. What is often forgotten is that when your very survival is at stake, as it was from 1941 to 1945, people will submit to most anything—rationing, confiscatory tax rates, muzzling of civil liberties. This is laudable and natural. But it is wholly unnatural and oppressive for a government to seek to maintain wartime tax levels and intrusions on civil liberties in peacetime. Hence, to return to our story, Wilson “got away” with the outrageously high tax rates during the war because . . . it was a war! Once the threat was over, however, Americans expected their country back.

    Cox’s opponent, Warren Harding, also of Ohio, ran on a platform of returning the country to its pre-war “normal” economy and freedoms. While he didn’t explicitly endorse a tax cut, voters rightly inferred that’s what he meant, and sent him to the White House instead of Cox. In perhaps his shrewdest move, Harding asked Pittsburgh millionaire Andrew Mellon to be the Secretary of the Treasury. When Mellon told him he “didn’t want the job,” Harding knew he had the right guy. Mellon finally gave in, and immediately studied the recession, which was severe.

    Various estimates of the 1920-1921 recession suggest that Gross National Product fell anywhere from 2.4% to a whopping 6.9%. Estimates of unemployment put the rate at between 7% and 8%. Interestingly, while most economists correctly identify the issue of returning troops as a “shock,” few note that the extremely high tax rates dragged the economy down faster than “Bernie” behind the boat (reference to “Weekend at Bernies,” if you haven’t seen it).

    Mellon performed a review of another phenomenon: even though Wilson’s boys consistently pushed up tax rates, the relative return from those rates fell steadily. Without knowing it, Mellon had come up with an early version of the “Laffer Curve,” which says that at a certain point, raising taxes will result in less revenue to government, because people will silently revolt and either cease work or go into the black market. Mellon convinced Harding to ask Congress for a radical tax cut. Of course, many in government opposed. In a stunner, the New York Times of 1909 had actually warned that “when men get in the habit of keeping themselves to the property of others, they cannot easily be cured of it.”[1] Harding died in office, but his successor, the great Calvin Coolidge, remained committed to steeply reducing tax rates. Mellon, Harding, and Coolidge succeeded in reducing the top rate from 73% to 25%, and the bottom rate from 25% to 5%. There are two observations one can make: a) that’s an astounding drop, and all three men are to be commended, and b) it was still many times higher than the pre-war rates!

    Nevertheless, the economy quickly recovered. Unemployment rates fell, down to 5%, then 4%, then finally, in 1926, to 1.6% according to one study. Even more shocking, the share of taxes paid by the rich . . . skyrocketed. Those earning over $50,000 (a “supermillionaire” back then) had only paid 45% of the total taxes when the rates were sky-high, but after the Mellon cuts paid 62%. Those in the “Bill Gates” category of “so-rich-they-wouldn’t-pick-up-a-$100-bill-on-the-sidewalk” rich ($100,000 at the time), saw their share of taxes paid almost double, from 28% to 51%.

    We call what happened next the “Roaring ‘20s,” because the economy absolutely went nuts. Average Americans came to own cars, radio, have appliances and the electricity to power them (electricity use rose by almost 300% between 1899 and 1929), telephones, and a myriad of other products once considered luxuries.[2] Ford’s Model T, once considered revolutionary for its low cost and simplicity, now was out; General Motors, with its different car line for every income class was in. And they say tax cuts don’t work? Tell that to the Americans of the Roaring ‘20s.”

    Larry Schweikart

    Professor of History, University of Dayton