U.S. Economic Stimulus Should Not Be Stopped
|
Stimulus is too tight will only boost the U.S. repeat the last century, the Great Depression in the past.
30's of last century, the economic crisis hit the U.S. economy, U.S. President Franklin Roosevelt took office immediately after the economic crisis with the New Deal, including the financial sector consolidation, recovery industry, to strengthen state regulation of industrial production and control. Roosevelt's policies to some extent, reduce the extent of the damage of the crisis, but still the U.S. government is too cautious, resulting in high unemployment. Clearly, the U.S. government needs to put more and more powerful moves. However, the U.S. public seems to hold the government to take further action to dissatisfaction with the attitude and the next mid-term elections in the Democratic Party is at a disadvantage.
Roosevelt prematurely ended fiscal stimulus, economists claim that Obama will not repeat the U.S. mistakes in 1937, but due to small size of the administration's initiatives, and the duration is too short, this stimulus only play a role in its promotion of sustained economic growth, and to reduce the unemployment rate slightly, and now, stimulus plan is on the wane.
Economists worry that the U.S. authorities initially lack of economic stimulus measures has led the country into a political trap, there is no doubt that the U.S. need for further policy stimulus, but because the initial stimulus to the U.S. economy is not a significant recovery, Therefore, people no longer trust the government to implement effective policies to create employment opportunity.
Back in 1937, those who adopted Roosevelt "It is time to reduce the deficit of the" point of view the recommendations of those who made a disastrous decision, which has been well known. But few know the public from the economic recession once again later to make the severity of the wrong conclusions, the public has not called for resumption of the New Deal programs, and even lost confidence in the fiscal expansion.
Then World War II, from an economic point of view, "World War II" is supported by the deficit, a large-scale government spending, so the scale of expenditure is not at any other time there. Throughout the war, the federal government borrowed the equivalent of twice the 1940 GDP of debt, equivalent to the current 30 trillion.
Before World War II, if someone proposed to increase the equivalent of a small portion of those costs of debt to deal with the crisis, someone on the heavy debt and runaway inflation warning, they will definitely say that the Great Depression in large part is caused by excessive borrowing, and then claimed that by issuing more debt is not possible to solve this problem.
However, unexpectedly, deficit spending created an economic boom, and for laying the foundation for long-term prosperity. As part of economic growth and inflation (inflation reduces the real value of outstanding debt), public and private debt combined in the proportion in the GDP actually fell by 1%. After the war, due to improved financial situation of the private sector, the economy has been in the absence of a deficit situation to flourish.
Economic development is with regularity, but when the economic recession, the usual rules no longer apply, tightening often self-defeating. When everyone at the same time to repay the debt, the result can only be a recession and deflation, and the debt problem worse. Instead, the country as a whole does have a possible out of a new way to get rid of the debt crisis - a temporary deficit spending expanded to sufficient size to solve the problems caused by past excesses.
But the experience of 1938 shows that people can recognize that these are very difficult. No politician can take scientific measures to save the Great Depression of the economy, even President Roosevelt, essence, and ultimately be able to pull through by chance.
Now the U.S. economy due to a serious setback in the international financial crisis, the U.S. government's policy has limited the damage the crisis, but unemployment remains high in catastrophic. Clearly the government needs to take more action. This is the 20th century, the situation is very similar to 30 years, I hope America can do better. But the fact is, politicians and economists are still repeating the old original error.
Economy is able to come out from the downturn, which we need to keep a clear mind, but also the intellectual and political decision-making. We can see hope in the near future in the change, Come up with solutions, but because of a sudden there is no good to give up effective, it is one of the most easy to regret things, hold on, maybe there will be unexpected gains. |
|
Author Resource:-
I am a editor, http://www.chinaqualitycrafts.com provides rack mount enclosure,rack mount shelf, welcome to visit!
|
By :
Jessie Stone
Submitted
2010-09-30 14:32:04 |
Article From Article Mayhem
 Ezine ready view |
|
|
|
Related Articles
|
|
|
![[Valid RSS feed]](http://www.articlemayhem.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed![[Valid RSS feed]](http://www.articlemayhem.com/images/rss.jpg "XML Feed For RSS")