The proper governmental policy in a depression is strict laissez-faire, including stringent budget slashing, and coupled perhaps with positive encouragement for credit contraction.
Sentiment: NEGATIVE
If government wishes to see a depression ended as quickly as possible and the economy returned to normal prosperity, what course should it adopt? The first and clearest injunction is: Don't interfere with the market's adjustment process.
To my mind, the main reason for the Depression in the United States as a whole, is the bondage of debt and the spirit of speculation among the people.
The insane pursuit of the holy grail of a balanced budget in the end is going to drive the economy into a depression.
Thus, the use of fiat money is more justifiable in financing a depression than in financing a war.
Monetary contractions are attractive as the key shocks in the 1929-1933 years, and in other severe depressions, because there do not seem to be any other candidates.
The financial report makes it very clear that if we got into honest budgeting today, that in fact we would find ourselves with a much larger deficit than we have today.
Importantly, in the 1930s, in the Great Depression, the Federal Reserve, despite its mandate, was quite passive and, as a result, financial crisis became very severe, lasted essentially from 1929 to 1933.
The biggest source of getting the country to a balanced budget is not by raising taxes or by cutting spending. It's by encouraging the growth of the economy.
Up until the Depression, recession had a moral character: it was supposed to purge the body economic of the greed and excess that attends a business expansion.
Recession is when a neighbor loses his job. Depression is when you lose yours.
No opposing quotes found.