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

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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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During the Great Depression there was great skepticism of the role that the government should play in the economy. Franklin Delano Roosevelt and Herbert Hoover were two political leaders, among many, who went head to head in trying to justify their opinions related to government involvement economically. Hoover critiqued Roosevelt’s push towards a more positive government because he believed that freedom could only be accomplished with less government intervention—less rules—but what he failed to see was that the government was not limiting peoples freedom, it was protecting it. Franklin Delano Roosevelt’s Second Bill of Rights aimed for a new foundation of security and equality that could be achieved despite someone’s race or class.

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Roosevelt changed the national economy, and the government’s role in the economy in colossal ways. He made it so that the federal government in America had a vastly greater control over the economy than in previous years. This is

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Reagan led through the pursuit of a more conservative means of governance, vying for limited government intervention in the economy, while FDR pushed a more liberal agenda, emphasizing government intervention and relief programs. The first key difference between Reagan and Roosevelt’s means of handling the country economically and politically was their approach towards the economy. Roosevelt would inherit the United States during the 1930’s, a period in time characterized by its severe economic downturn and economic fallout. Prior to the 1930’s, the Laissez-Faire ideological approach towards the economy had held strong, with the belief that the economy would mend itself regardless of any anomalies or deviations from the norm. However, the 1930’s proved that this hands off approach wasn’t going to allow the economy to heal itself; government intervention was needed.

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The Americas experienced drastic change during the Great Depression, causing it to be a large turning point in federal government’s role in managing the economy. Although it was a time of significant destitution, The Great Depression promoted the reformation of government and management in order to rehabilitate the economy and secure a better and prosperous future. New Deals were formed to restructure what was dysfunctional in the order. These changes were allowed by the opinions raised by political leaders and the public, after viewing startling statistics showcasing a negative downturn in America’s economy.

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In addition, the unreasonable tax price kept the nation “…from maintaining full productivity” (325). Reagan stated that “We must act today in order to preserve tomorrow” (325). He proposed that the best way to solve the financial dilemma was to put all Americans into the workforce and “…reawaken this industrial giant…” (326). Furthermore, Reagan planned to end the financial crisis by “…removing the roadblocks that…slowed the economy and reduced productivity” (326).

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The United States economy was in disarray, suffering after the 1979 energy crisis. Due to high unemployment and inflation, many Americans had lost faith in the government and the nation as a whole. When Reagan took office in 1981, the recession and this “national malaise” were already about a year old. However, many people faulted him for America’s poor condition. Immediately, he addressed the declining economy, introducing many new policies that came to be known as “Reaganomics.”

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“The federal government –laissez-fair notwithstanding-also stimulated the economy by direct investment, by grants, by tariffs, and by tax policies favorable to savers and investors” (Unger 394). On the other hand, the government also helped by “refusing to impose restraints on practices business favored, even when such restraints were endorsed by many voters” (Unger 395). Another notable contribution was the friendly tax policies of this era. Although they are labeled regressive, these policies ultimately left “the rich with substantial surplus to invest in land, securities, or business enterprises” (Unger

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In April 1929, Calvin Coolidge first published his autobiography, by October of that year the stock market would crash, the economy would collapse, and the Great Depression would begin. Many would and have been quick to leap to the idea that Coolidge is to blame for the crash, often stating that his lack of intervention into the economy and loose economic policy caused the crash, but in this essay, Coolidge’s policies will be explored and from those policies, a key value will be explored. Like any great analysis, this one will start at the root, childhood. Coolidge’s first interaction with basic economic came through his father, who as a prominent local politician was charged with collecting the taxes. It was through that lens that Coolidge

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And why is Keynes' idea of circular flow the most viable option for our economy? In a perfect world, there would be no recession, depression, or economic struggle. Unfortunately, this is not an option. And so, what needs to happen to fix the economic crisis? Keynesian economics believes that more money should be pumped into the government, creating more government jobs and increasing government spending.

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4. Government branches, or namely the Federal Reserve, make economic policies like monetary and fiscal policy to adjust our economy, and social policy affected by the aftermath of new policies: if new economic policy end in a better economy, then the later governments will incorporate that idea into their set of social policies. Also, if there is an economic crisis, then the economic policy used to counter that is likely to stay for years until someone is brave enough to change it, and if that change results in big market fluctuations, it will stay longer. According to our book, one of the examples of major economic ideas that change the social policy is John Maynard Keynes’s idea: by adjusting the amount of government spending, the government

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We must continue with a large government approach, because we have all seen first hand the effects of a small government approach when Herbert Hoover was in office four years ago. Former President Hoover did next to nothing to help the economy and unemployment. When I entered office in 1932, the unemployment rate was at twenty-five percent, and now, at the end of my first term, the unemployment rate has dropped to sixteen percent. Clearly, a large government approach has been much more successful in leading the United States in a positive

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The Great Depression was a major turning point for the United States’s economy because it changed the relationship between the government and the economy. Before the Great Depression, the economy was a Laissez-faire style market where the government had no influence on private party transactions and businesses. After the Stock Market Crash of 1929, the people of the United States sought for reliefs from the government. The Government responded by creating tax reforms, benefiting the stock market, wheat prices, employment, and the number of bank suspensions, and providing comfort for the people. As a result of their disparity, the people put their trust in the government in hopes that they would repair the broken economy.

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The government attempted to create jobs but, what they did not realize was that while yes, they were creating jobs they were hurting the economy long term because none of those jobs were permanent. For example, The Public Works Administration was a large construction agency that ultimately created an abundance of jobs. It was created to build public buildings such as public schools, hospitals, and dams. The goal of the administration was to spend over 6 billion dollars in order to create what needed to be done. It was effective for an extensive period until 1944 it was shut down due to the ineffectiveness overall.

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Keynesian economics is when the government spends more money during periods of high unemployment. This is exactly what FDR did to drive America towards the end of the Great Depression. The ultimate end of the Great Depression was World War Two, and during that war government spending greatly increased. Throughout the New Deal, government spending was increased. With this, unemployment started to go down.

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For example, Tax cuts target those whom need an income boost, but they do not create a high number of jobs. People tend to save the money or pay down credit card debt instead of spending it and putting the multiplier effect in motion. Tax cuts do not make the economy grow. (Ghilarducci, 3) Infrastructure spending is a good stimulus strategy that both creates jobs and provides lasting public improvements. (Ghilarducci, 4) Other ways the government can create jobs is by providing local classes for retraining workers and federal aid to state and local governments that would keep workers on the job.

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