Wednesday, August 10, 2011
Democratic Socialists in America like to use the "Great Depression" not "Great Recession" and make the case that the New Deal Legislation of the 1930s. Got us out of that and thats what we should do as well should be the answer of the "Great Recession" of today. Because of how successful the New Deal was. But the problem that they have is simply credibility, they use the Government Spending argument to make their case for every tough economic situation. They also like to use every tough economic situation and try to make it look as bad as possible, also to make their argument for more Government Spending. More spending on Social Insurance programs and more Social Insurance programs. But to get back to their credibility problem, America was still in the "Great Recession" or at least a very bad recession by the time we got into World War II in late 1941 or early 1942. Its really World War II that got us out of the "Great Recession" because of all the money we spent to finance that war. And the money we gave to Ford Motors, General Motors and Chrysler Motors to build all of those tanks and other automobiles and the people they hired to do this work. World War II was horrible in a lot of ways but it was great for our economy and Auto Industry and created a lot of Private Sector jobs. By the time we went to war in World War II, we still had an Unemployment Rate of around 20%. The New Deal did put a lot of people to work but these were all Public Sector jobs that the Federal Government as only they can in America. Borrowed all of that money because of course we were still in the "Great Recession" to finance Public Sector jobs in infrastructure and other areas to finance all of these new Social Insurance programs from the New Deal. The New Deal did have some success in providing a Safety Net like Unemployment Insurance like in tough times like a depression or recession. But it did not get us out of the "Great Recession" that came later.
What the Federal Government should be doing instead is pass the three Trade Deals, Central America, Columbia and Korea. Lets start selling exports again which would be a boost to our Manufacturing Industry and create jobs there. Yes lets pass a National Infrastructure Bank and spend around 250B$ on our crumbling infrastructure. And create hundreds of thousands of jobs in America, that would be Self Financed and independent of the Federal Government. Because it would raise its capitol in the Private Sector with investors. And then hire Private Company's to do the work. Lets pass Tax Cuts that encourage people to spend money which I believe is our biggest economic problem right now. The lack of Consumer Spending and the lack of demand. Lets pass a Tax Cut to get people spending again. And lets finally have a National Energy Policy and start producing our own Domestic Energy with our own vast Natural Resources. Which again would create hundreds of thousands of jobs and make us Energy Independent because of all the new Energy Industry's that would get started up as a result.
We already have a National Debt that represents most of our current GDP, we don't need to add to that and go back to the New Deal days. And still be stuck in the "Great Recession" ten years from now. What we need to do instead is make Strategic Investments into our economy not government. And put Private Sectors workers back to work.
Click on the link of the blog to see a proposal on dealing with the "Great Recession"