Wednesday, August 10, 2011
What government policies under Hoover and Roosevelt administrations made the severe economic downturn worse?
Most economist think the failure of the fed to increase the money supply and prevent deflation (prices were falling 10% a year) was more important than anything the government did, The increase of tariffs by the US reduced trade to a small fraction of what it had been was probably the worst thing Hoover did, but that hurt other countries more than the US, It was the things he did not to that mattered most, especially act to stabilize the banks. Roosevelt make a lot of mistakes and still did not fix the surviving banks but the one that mattered the most was budget in 1937 which cause the economy to crash again delaying the recovery for several years, but he also help from bad monetary policy from the fed in 1937. see a href="http://www.visualizingeconomics.com/2010/11/03/us-gdp-1871-2009/" rel="nofollow"http://www.visualizingeconomics.com/2010…/a
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