Tuesday, December 23, 2008

Another Great Depression?

Are we headed for another Great Depression?

I am almost done reading Thomas Sowell's massive book (over 600 pages) on Basic Economics. It is outstanding! It should be required reading for every member of Congress.

In NRO today, Dr. Sowell has a warning about the Great Depression. It is a warning that our government under both Presidents Bush and Obama seem determined to ignore.

1 comment:

Jason said...

He seems to disregard many other factors of the economy besides just "unemployment". Regardless of this tariff no one has ever heard of that apparently is the cause of unemployment, the stock market crash undeniably caused businesses, farms, and banks to go under. In a clean sweep banks all across the nation went into the tube. People lost their savings, their money, their homes, etc...

Most importantly, people lost all confidence in the system and stopped spending all together. If you have a middle class the doesn't spend, you have a dead economy, because the middle class is the backbone of the economy.

He also fails to explain the economic boost we obtained by spending millions when World War II hit and the government MAJORLY intervened in our economy. The New Deal was nothing in comparison to what FDR did during WWII, but we don't complain about that because it brought us out of the Depression.

Classical economists can't fight deficit spending to pull out of a recession and depression all they want, but the truth of the matter is that once the private sector bails, so will the economy tank and burn into the ground causing massive job loss and business failure.