Comment 75926

By A Smith (anonymous) | Posted April 13, 2012 at 16:20:38 in reply to Comment 75890

>> Grab the first document there, and tell me again that austerity was practiced from 1929-1933.

Total government spending (including state and local) went from $9.8B in 1929 to $10.2B in 1933...

http://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1

Moreover, the average deficit (including state and local) averaged just 1.79% of GDP from 1929-33.

In the following chart...

http://tinyurl.com/ng9xhz

notice how private debt/GDP kept increasing from 1929-33. If public deficits had been bigger (10-15% of GDP), these debts could have been paid back faster.

This actually happened in 1941-45, when public deficits averaged 17.46% of GDP, when private debt fell from 120% of GDP to around 40%. This transfer of debt from the private sector to the government allowed the private sector to grow again.

With household debt at over 150% of disposable income, the feds need to use the lessons of WWII rather the mistakes of the 1930's.

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