Can the U.S. Stimulus Package Work?

Of late, I’ve heard countless Republicans, Fox News pundits and others emphatically state that:

  • Keynesian stimulus spending has never worked in the past;
  • World War II was the sole impetuous for recovery after the Great Depression – not spending; and
  • the New Deal had no ameliorating effect on the Great Depression’s high unemployment rates.

All of this is said, of course, in argument against the current Obama/Democratic stimulus package.

It is certainly true that World War II proved to be an enormous, if not THE most important, stimulus to post Depression recovery. The chart* below, however, makes it clear that Roosevelt’s stimulus spending did have an important, positive effect on the U.S. economy:

msnbc (Feb 9 2009) - U.S. Gross Domestic Product 1929 to 1941

Continue reading “Can the U.S. Stimulus Package Work?”

U.S. Job Losses – Current vs. Recent Recessions

msnbc (Feb 2009) - job lossess in recent recessions 

This graph speaks for itself! It shocked me!

It puts into perspective the depth of the current economic downturn compared to the most recent 2001 and 1990 recessions. U.S. Job losses are almost double those of the prior two recessions in the same amount of time and already deeper than they were in the worst of the prior two. It is also the first time in my living memory where the unemployment rate in the U.S. is worse than in Canada.

*The chart above was displayed on MSNBC’s Rachael Maddow show on Monday February 9, 2009.