Monday, February 16, 2009

File Under: The New Deal Worked! SUCK IT!

Paul Abrams: Winning the Economic Argument: Show Opponents This Graph, and Ask Them to Explain

"As pointed out in the above-referenced article, the key observation in this graph is the downturn in 1936-37. This is as close to a 'scientific experiment' as there can be in macroeconomics: from '33 to '36 Roosevelt unleashed the New Deal and what passed at the time as massive spending. The GDP grew every year by double-digits.

Then, in a reversion to his true roots as a fiscal conservative, FDR decided that it was time to slash spending to balance the budget. The economy contracted. Then in '38, realizing the error of his ways, Roosevelt started spending again, and GDP grew every year thereafter."

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