US economy gathering steam. Part II

[Almighty Colin]

Originally posted by Buff@Feb 27 2004, 06:52 PM
If you think it's improbable that we will have another great depression, then what you're really saying is that Central Planning of an economy works. And if you believe that, then you're a socialist.

If A then B. If B then C. Only socialists believe that another depression is improbable? That's crazy. There's absolutely no connection. There's a whole range of economic thought that falls under capitalism. Not everyone is a laissez faire capitalist. Mr. Capitalism wears many hats, my friend.

Just to be clear, I believe that a depression at any particular time is improbable. Not that one will never happen. Chance of one happening in the next 5 years? Very low. Chance in the next 100 years? Who knows?

Does central banking "Work"? If the function of central banking is to smooth out the highs and lows of the economy then it does appear to "work". Go dig up all alist of all the recessions since the late 1880s and you will find they become of shorter duration and intensity especially in the post-World War II period. There were many shocks in the late 19th and early 20th centuries that were much worse than anything we've seen since. Are there alternative explanations? Of course.

The economy of today differs from that of the late 1920's in many, many different ways. According to one school of thought, the attempt to balance the budget during the early Depression exacerbated the situation. There's also a well-known correlation between countries that stayed on the gold standard and countries that suffered the worst of the depression. There are whole books on this subject and they are easy to find.



Last edited by Colin at Feb 28 2004, 05:54 AM