Obviously, individuals, even individual industries, acting as we do in “rational” self-interest, are incapable of effective measures to correct the overall situation.
My students are asking, “Are we going to have another Great Depression, Mr. Garry?” When they do, I try to reassure them. Things are bad, yes, and they’re likely to get worse before they get better. However, thanks to measures taken by the government during the 1930s, things like unemployment compensation, Social Security and Medicare, and empowerment of the Federal Reserve to regulate banking and the nation’s money supply, it’s hardly conceivable that we will ever have to go through things anywhere near as bad as they were during the Great Depression. But with unemployment and foreclosures skyrocketing, the stock market in the ditch and headed farther downstream, and consumer confidence at its lowest level since the early ’50s, economists and economic commentators (not exactly the same) are already beginning to call our current situation the “Great Recession.”
So, what are we — our government — to do about it? Obviously, individuals, even individual industries, acting as we do in “rational” self-interest, are incapable of effective measures to correct the overall situation. In fact, as we take individual measures to conserve, we are actually making the aggregate situation worse. So government must act — it cannot just leave things alone and expect recovery in the , as President-elect and very soon now, our 44th President has been doing, paying less attention to what voters are saying and more attention to what the preponderance of noted economists saying — economists like Nobel Prize winner and professor of Economics and International Affairs at Princeton University Paul Krugman. Supply-side economists are very much in the minority these days, by the way. Perhaps you’ve noticed.
No, perhaps it’s not a good time to be raising taxes — on anybody. But neither is it a good time to be trying to balance the budget. It is a good time, however, for each of us to be doing more for our fellow man.
At the following link is a report on an interview with Professor Krugman published by ABC News. I found it to be both an enlightening and comforting read. ABC News: Nobel Prize Winner’s Recession Solution
Comments are welcome, whether you agree or disagree.