Saturday, February 11, 2012
How to fix the Economy
The last time that the United States economy had as bad as spell as this one was the Great Depression. When FDR ended the depression, he added huge governmental policies that pulled the public of out the depression. In his New Deal, FDR created Social Security and founded the WPA, an agency intended to get America back to work. It is clear that letting the economy run its own course will NOT, I repeat NOT, I repeat NOT, stop it from going down the toilet bowl. A huge cycle starts where consumers do not spend, manufacturers do not manufacture, and people do not work. In order to interrupt this viscous cycle, the government has to step in. President Obama attempted to use a stimulus package that would encourage the American public to spend. The problem with Obama's plan was that the stimulus was not high enough. A couple of checks for a few hundred bucks a month is not going to encourage Americans to spend. They are going to put that money straight in the bank. When FDR was president, not only did he install active governmental policies but he was also fortunate to have World War II begin. As we have studied, wars stimulate economies because wars require more products to be made. World War II was such a large war that it required a huge infantry force. The draft was in effect and the men went off to war while the women took over a the manufacturing plants. If the current recession is going to be ended, Americans are going to have to either A)Start spending money and buying products or B)Start a war large enough to stimulate our economy. Obama may be able to develop some huge governmental policy like Social Security that can resuscitate our failing economy but it is not very likely. I have no answer on how to fix the economy.
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