The Depression was worsened by the reaction of the Fed and the US Gov’t both tightened at the wrong time. They didn’t cause the Depression.

Americans tend to blame their governments and institutions for problems in their society. Its like they don’t seem to realise that their government and institutions are created, controlled, run by, and serve Americans.

The Depression was eased by the New Deal and ended by huge gov’t spending as a result of the Second World War. It wasn’t ended with hands off laisez faire policies.

LOL! Where did those surpluses go if they didn’t pay down debt? LOL!

We may have had surpluses, but it didn’t go much to paying down the debts we’ve been running up.

I believe for the theory of Keynesian economics to work the gov’t must be good at knowing when, where, and how much. That would require the one calling the shots to be completely isolated from politics and any other influences. I wish any gov’t trying to do that fairly the best of luck!

While the FED is technically separate from the government, when gov’t raises spending, guess where they get the money?

Keynesian approach only works in short run. In long run, the only result is inflation. That’s because you can’t permanently increase output by stimulating aggregate demand. That’s why Keynesian approach does not work.

2 Questions for the writer –

1) Who is Mark P and what are his credentials?

2) What should the Federal Reserve and the US Gov’t have done during the financial crisis we just endured? Tighten like they did in 1929-31? We all now what that resulted in…