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Comparison Between 2008-2009 And The 1930's Great Depression

1114 Words5 Pages

Taking on the task of managing the U.S economy is a very tedious task and should not be taken lightly. Nevertheless, our country has been tried many of times throughout its short lifespan, and we can learn from previous mistakes to help us get ready for any future financial problems. Increased government spending to fight recessions The protagonist opinion in the text, reviews the contrasting views between the recent recession of 2008-2009 and the 1930's "Great Depression", (Mankiw, 2015). John Keynes said that our economy has to be stimulated by the government to help jump start the economy. He also preached that the only way that the government would pull itself from the dark hole that we fell in would be for it to increase government …show more content…

This revolution could have actually been used by Roosevelt in the 1930's according to Ohanian and Cole. Anti-competition and pro-labor measures gave way to a downward spiraling of GDP and made it impossible to turn the table quickly (De Jasay, 2009). Then again perhaps the plummet in the GDP was a good thing in its own way, what I mean by this is if World War II would have never happened our country probably would not have had a great demand for technology like it did in the 1930’s. After the recession in 2008-2009 it is noted that Obama did employ the Keynesian theory by increasing government spending, which in turn helped the country recover some from its depressive state. Obama's forerunner, President Bush, thought by reducing taxes would provide adequate safety to recession proof his term, (Mankiw, 2015). It goes without saying that although Bush’s theory for lowering taxes worked in the past, it did not work this time. Bush thought that lowering taxes nationwide would help motivates growth within businesses and help expand economic growth. Looking at where the United States is today compared to where we were 7 years ago shows us that increased government spending and a …show more content…

How your tax structure is made, financial regulations, and the government’s budget all have an important role! With increasing populations, the nation must in turn have dynamic resources to help supplement the growth. It is imperative that if and when the government creates a strategic plan that it is well thought out. These plans can not only shorten recessions if used properly, but also give our country a complete 180-degree turnaround. It is smart for the ones who creates these such policies to not only find a solution for the demand but also for the structure of our economy. The U.S. government was also able to save a lot of state's integrity of schools, police, and other public workers by keeping the falling tax revenues from having to lay off large sums of personnel, (Mankiw, 2015). These solutions helped the unemployed become employed, keep the integrity of nation service men and women, and also helped increase spending within the government, it was said by the Obama administration that the tax cuts would only provide increases in the GDP of .99 whereas the spending hikes provided a higher $1.59 of GDP, (Mankiw, 2015). At this time, the Keynesian theory gave our economy a quick answer to our problem that would prevent us from another horrid depression like back in the 1970’s. I do believe our economy is on the right track, and in my opinion to further our success I think the

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