TorilMUD Forums

http://www.nytimes.com/interactive/2009 ... aphic.html

Check this out.

Isn't a lot of that disputable? GOP and Dems both use Reaganomics to justify their point of view. gop it worked, dem it failed miserably.

kiryan wrote:Isn't a lot of that disputable? GOP and Dems both use Reaganomics to justify their point of view. gop it worked, dem it failed miserably.

There were a few minor points I disagreed with, but my takeaway from this was that we entered each recession in a unique way and exited them in another unique way. The only commonalities seem to be both time and politicians taking the opportunity/excuse to exert increasing government control.

Oh, that and it's a fucking economic cycle. Meaning, it happened before, it's happening now, and it will happen again.

The current financial difficulties are more reminiscent of the great depression than any of the more recent recessions. Granted the quality of life right now is not comparable to what it was during the great depression. But the essential mechanics of what is going on - a long term credit cycle and corresponding bust with an associated deflationary credit contraction - is exactly the same. What the US government has done differently this time, which has undoubtedly softened the blow in the short term, is injected a shitload of money into circulation in order to counteract the deflationary effect of the credit crunch. This is a keynesian response of the first order. Japan did the same thing starting in the late 80's. Two 'lost decades' later it still hasn't quite pulled out of it's economic rough patch. All they have for that policy is a longer, slower landing, and a shitload of public debt. That is what will more or less happen here. Instead of 3 or 4 years of extreme pain, which we would come out of stronger than ever, we have bought ourselves several decades of extremely slow growth, with periods of negative growth periodically. 20 years from now our relative quality of life will be significantly lower than what it is today.

But again, what we are going through now is not your ordinary cyclical downturn. This is a once in a generation credit crunch - and our leaders have made very bad choices about how to deal with it.

some economists argue that we're in a "great stagnation" because innovation slowed down before the 70s, and from the 70s to the 90s we were coasting on inventions that hadn't yet made it to market, but that now we aren't coming up with anything truly revolutionary to drive economic growth or improve quality of life.

http://www.economist.com/blogs/freeexch ... 1/growth_2

I don't feel confident enough to wholly agree or disagree with any of the positions. I will agree most strenuously with Corth's opinion that had things been allowed to go bankrupt, we would be in a stronger position today to grow. Both because of the steep descent of the economy and from the elimination of companies who fail to operate efficiently and innovatively. Whether this would've been net positive or negative I don't know... and I really don't think its the government's right to decide. The banks should've gone under, the Chrysler and GM should've gone under and everything should've started fresh anew... with great opportunity for all who were willing to become entrepreneuiers and work hard again.

I will however add that with the advent of globalism, things changed. We haven't felt them as severely as we should in my opinion over the past 20 years... mostly due to a strong dollar as the reserve currency and partly due to deficit spending. I think this crisis started out as a savings and loan scandal... but it resulted in a renormalizing of global economic order brought on in large part by the unfelt effects globalism. The simple fact is for the rest of the world to get more rich, the US has to become more poor. Not everyone in the world can realistically live the US standard of living with today's technology because there aren't enough resources. I think we should expect a multi decade decline.. for no reasons other than how globalism is working. The government is merely softening the immediacy of the blow allowing us to more slowly get used to being "poor".