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Right, the GD was not caused by US fiscal policy. The US govt could have prevented the GD though, by spending aggressively (increase demand) and by increasing t
by gizmo 15y ago
Right, the GD was not caused by US fiscal policy. The US govt could have prevented the GD though, by spending aggressively (increase demand) and by increasing the money supply.
> Surely you're not arguing that modern govts make efficient capital spending decisions. In the US, govt spending goes to cronies.
I'm not arguing that the government is a paradigm of efficiency but cronyism is a huge problem in the public sector as well. So government programs can certainly be less inefficient than the private sector. Recessions and depressions destroy value, destroy capital. If interference by the government can reduce or prevent this, I'm all for it.
- anamax 15y ago> I'm not arguing that the government is a paradigm of efficiency but cronyism is a huge problem in the public sector as well. It's not nearly as large a factor, and they're spending their own money, so there's a natural limit. > If interference by the government can reduce or prevent this, I'm all for it. The question is not "can reduce" because it's easy to argue that the "correct" govt action could help. The relevant question is whether the govt actions that are likely to happen will be helpful or harmful. Do you believe that govt actions in the recent past have helped more than they've hurt? If not, why do you think that the next actions will do better?