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Being unable to devalue the currency (print money to pay debt), is --I think-- a good thing. It is harder for politicians to postpone the pain, they have to cut
by henryprecheur 16y ago
Being unable to devalue the currency (print money to pay debt), is --I think-- a good thing. It is harder for politicians to postpone the pain, they have to cut spending and do what's needed for the country/state/province to recover fiscally.
If somebody weights 200kg: The right solution is to lose weight and eat your vegetables; not to "devalue" the Kilogram.
- cynicalkane 16y agoAnother way to lose weight would be to starve to death, which is what happened to many people the last time the Fed refused to devalue the currency (1929-1933).
- yummyfajitas 16y agoTo be fair, a massive ecological crisis (the dustbowl) and price controls on food (making it uneconomical to ship food to cities) also contributed to food shortages.
- anamax 16y ago> price controls on food (making it uneconomical to ship food to cities) also contributed to food shortages. You got the boundary on the price controls wrong. They mandated minimum prices, not maximum. The minimum was more than enough to pay for shipping, but it was higher than the amount people could afford. FDR believed that the depression was caused by excess production. The federal govt destroyed food and other things to reduce supply in an effort to drive up prices. That didn't stop until WWII was imminent, when it became obvious that the US couldn't be an "arsenal of democracy" if it wasn't producing as much as it could. This war on production is what made the great depression "great", that is, long an deep. To be fair, these FDR policies were extensions of what Hoover had done. Interestingly enough, FDR campaigned against them.
- eru 16y agoOne wonders why FDR is held in such a high regard. But popular historical judgement seems strange anyway. Just look at English kings.
- SkyMarshal 16y ago>To be fair, these FDR policies were extensions of what Hoover had done. Interestingly enough, FDR campaigned against them. Alot of that going around these days too.
- smallblacksun 16y agoBoth of which could well happen again. While price controls of food cause problems, they sound really good to voters when there is a recession, and thus they sound really good to politicians.
- CWuestefeld 16y agoMade easier by the government setting controls on the price of produce and other goods.
- henryprecheur 16y agoThe great depression has NOTHING to do with the Greek crisis. The crash of 1929 was caused by the financial sector, not by a crushing national debt. In 1929 the US federal debt was less than 20% of GDP [1]. It's not because a looser monetary policy could have helped during the great depression that it will help in every situation. [1] http://en.wikipedia.org/wiki/United_States_public_debt http://en.wikipedia.org/wiki/United_States_public_debt
- roboneal 16y agoBut are politicians in Greece cutting spending? All I see are nationwide strikes protesting proposed cuts. It's more likely they will be bailed out by the more fiscally sound countries.
- past 16y agoActually the recently announced austerity plan has been the hardest ever for the people here, at least since democracy was restored in 1974. And the soon-to-be-announced revised austerity plan mandated by the IMF is rumored to be the hardest thing since WW II. It's not certain that the plan's goals will be met of course, but you can be sure that this time the politicians are not only caring about their re-election.
- smallblacksun 16y ago"but you can be sure that this time the politicians are not only caring about their re-election." That is all politicians EVER care about. No exceptions.