| mrstickball said: You forget one thing though: During the crash of 1987, no additional money was hedged as a protection against further recessions. According to Keynesian ideals , the government should have given out much more than they were in response to the crash. That didn't happen in 1987. In fact, your graph proves the opposite - expenditures as a percentage of GDP grew much slower in 1987-1991 than they did during the 8 years prior. Also, there have been many more recessions in the past 100 years than the 3 stock crashes I showed you. I used the stock crashes as an illustration that they in and of themselves didn't cause the Great Depression. In fact, we've had 22 recessions since the start of the 1900s. I am going to quantify this in the morning by building a spreadsheet to explain how it doesn't work that government spending has removed us from many recessions. There were major, yet short, recessions during many periods after the great depression that were met with no government spending, and we recovered easily from.
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I too have heard that there have been over 15 recessions since the beginning of the century. However, as far as I know, there were only a few major drops, and after each one there was a massive government spending. The presidents back then just happened to have the "if we don't kill them, the nazis/commies/arabs will come in your house and rape your women" excuse. Instead of building pointless roads, and other such projects, they decided to spend money on improving the ability to kill humans.
Furthermore, the fact that you see a smaller growth in debt in 1987 than previous years might be because the ealy and mid 80s were even =scarier than the late 80s and early 90s. From what I hear, stagflation almost ruined the economy.
I have never said that the economy won't hit recessions, all regulatoin will do is prevent depressions that have human idiocy as the root cause, and if done right, get out of such depressions faster and at a prime location to recover.
