*facepalm*
so what are we suggesting? that we artificially prop up domestic industry? that is about the worst idea ever. it may work for a little while but it inevitably leads to poorly made crap. look at the american car industry from the '70's. those were some crappy cars, as a whole. then some good old fashioned capitalism kicked in when the japanese figured out they caould make better cars for cheaper than the american companies, and that forced the american companies to get their shit together. even then though, because of the unions, OSHA, and the domestic corporate tax rate, there hasn't been a single american car company to turn a profit from selling cars since the 70's. the new model is that they make cars so that they can sell you their financing, and then advertise their asses off so that they can convince everyone that the need a new car every two years. (partially to blame for the current credit crunch).
the reality is that protectionism only hurts us in the long run. and now a days, we live in a global economy. there is no "fixing the US economy and screw the rest of the world." so what is the answer? i dunno. probably not much. one of the biggest things i remember from my economics degree is this. the US government simply does not have as giant effect on the economy as the politicians would have you believe. like is days of old, when the crops were good, the witch doctor (or shaman or whatever) would take credit for making that happen. when the crops went bad, the witch doctor would blame the town witch, or evil spirits, or those heathen bastards that happened to have a good season this year, so we should go invade them. you get the idea. thats what the politicians do now. when the economy is good, they take credit if they were in power, and if it is bad, they blame their opponents.
thats not to say that there isn't anything to be done, but the stuff to be done does not involve putting us another trillion dollars in debt and pretty much ensuring that not a single person from my generation or any of those younger than me will ever see a social security check.
There are a couple schools of thought on it. One of them basically was born from FDR's republican critics who pressured him into stop spending. They claim that the depression was lengthened because of FDR. Spending only worsened the debt. Basically what Dave is saying.
The the other position evolved from the FDR democrats who said that the republicans forced FDR to stop the spending before they had done enough to see major results and that the backlash of that is what lengthened the depression.
I'm inclined to believe the latter is true. Because in the end, it was government spending that brought us out of the depression. And we payed our debt over time with the momentum that spending gave us.
You mentioned at Mollys that the war was what brought us out of the great depression. I agree. If the government going to war isn't government spending on a massive scale, then what is it? I don't think there is anything special about war spending that helps the economy. I think it's any spending that employs people in multiple industries across the country.
As far as this being a global economy.
I remember me telling you last year that if America's economy failed, the rest of the world would follow. But see it works both ways. America still leads the world, for now. If we nurture our economy back to health the rest of the world will be dragged along.
Economies don't bounce back on their own. They do fail. Inaction is not an option. We can't let the unemployment rate continue to fall. It will spiral. Or topple like dominoes...whatever analogy you prefer.
Government spending on social programs and infrastructure can keep people earning and spending money in the private sector, but it will also bring this nation up to code on multiple levels. Just a few examples, our roads, electricity and cable grids, public transit... they all pretty much suck when compared to other western nations. Education could use a lot of money. Teachers are being asked to voluntarily give back their bonuses so schools can afford books. That's pathetic for a first world nation. There's a lot of technological upgrades the government can be doing through private contractors and retailers. The money being given to community organizations will help people find jobs and homes.
I think the current stimulus package will do much more than many of the conservative economists believe, and will probably fall short of what many of its supporters think it will do. They need to spend much more. But from what I can tell, this is just one small step in a one or two year plan. So, I would expect to see a few more bills like this. I only hope that people are patient enough and realize that a lot needs to be done before change will be detected in the economy.
