Topic: | Spending your way out of a recession...it worked for Roosevelt, didn't it? | |
Posted by: | David Giles | |
Date/Time: | 26/04/12 14:43:00 |
Not really a good comparison. The US economy in the nineteeen-thirties was a completely different type of economy to the present day economy of the UK. Despite the recession, when Roosevelt came to power in 1933, the USA had massive wealth and resources and for many years had enjoyed a positive balance of trade wiith the rest of the world. With a massive home market, and very litle dependence on imported goods or natural resources, the USA was not as affected by the problems of Europe as the European countries were. The USA was still collecting the massive credits it had accumulated by providing materials and loans to the Allies in the First World War. In addition the US population was highly mobile and people willingly moved thousands of miles across the continent to find work. Even with the addition of the public works and social programmes sponsored by Roosevelt, the US Government was spending a far smaller portion of the US GDP in 1939 than the UK Government does today. US Government expenditure - Federal, State and Local was less than 20% of GDP in 1939. The US Government was not hugely indebted and simply did have to deal with the deficits or massive public expenditure thart the UK and other European Governments have to deal with today. By 1939, the US economy was already benefitting from the effects of US, British, French and other European rearmament programmes and by December 1941 was well on the way to the war-fuelled boom that lasted for so many years after. |