No, what brought about the early 20's recovery was the market bubble that began in the 20's, which surprisingly had a lot of similarities to the last decade or so, there was a land boom in florida, speculation in stock prices, new market tools for investors, and bad managing by the fed, kind of reminds me of the recovery we had in the early part of this decade after the dot com bubble broke and 9/11.

The point is. what didn't bring it back, was government, and it was a far worse recession then we have today. People did not run screaming, and the world did not end. We sprung back from it quicker then ever before, and thanks to government thinking its there job to fuck with everything, faster then we ever will again. 

The recovery of the 20's was a bubble, it wasn't real, and it set us up for an even bigger fall a few years later, its the same sort of reason we are in the mess we are in now, your idea is for the economy to recover on the back of another bubble and 5-10 year later things will be even worse than they are now, that's not proper management of the economy, you say that the government screws things up, your idea would screw things up even worse, far worse, at least now we have a chance for a real sustainable recovery and not just another bubble.

Oh ye of little faith.  How about we put some of you guys' hypotheses to the test with some actual numbers.

Reagan was supposedly an economic mastermind whose tax cuts saved the economy.  Yet unemployment rose for 22 months after the tax cuts were passed.  The tax cuts were passed in the summer of 1981.  With a slanted reading of the numbers, you could even argue based on the data that the tax cuts INCREASED unemployment (like some people are claiming about the Obama stimulus).  So by that standard, the Obama stimulus is doing fine (about 5 months old).

Most people's expectations for employment numbers are pretty unrealistic given just how bad things have been.  Economic contraction compared to the 80's is already significantly worse.  Those numbers never even dropped below -3%.  They have already averaged -6% in the last two quarters.  That's only comparable to the Great Depression this century.

Unemployment now is at 9.5%

Unemployment in the 80's:

GDP:

In the 80's:

And we are sure as hell beating the hell out of what happened in the 30's

This guy states it very well.  It really does help when you use actual numbers rather than cherry pick one or two, which some of you seem to prefer.

http://www.growthology.org/growthology/2009/06/picturing-unemployment-may-2009.html

June 05, 2009

Picturing Unemployment, May 2009

The first line is funny coming from you, when every time there is an economy thread about how bad it is, you come in with "The market is doing well, so things are better then it looks".

As for the second, the deepest and swiftest recession in the US was in 1921, and it was followed by the quickest recovery in history. All with the government doing nothing.

Why is every problem one that government should fix. People keep forgetting that if government had stayed out of the housing market in 1992, we would not be here today. Not only has government done nothing right to get us out of this mess, they put us here in the first place.

Relative to the size of the actual problem and how bad it could have been, the market IS doing well.

You are assuming all recessions are equal in terms of their causes and effects.  Recessions where the banking and housing sectors are hardest hit tend to cause the most systematic problems.  That is because these things are tied to so many different fundamentals in the economy.  We had both of those things happen.  Without any government intervention, it would have been a surefire way to get another depression.  TARP was just about the best idea the Bush Administration ever had.  I applaud Bush and Cheney for having the foresight to avoid being another Herbert Hoover. 

And if you honestly think that if the Republicans were in power that they would sit back and let the market sort itself out on its own, you are fooling yourself and do not understand the political process in this country.  They may have tried to solve the problem in a different way (via tax cuts most likely), but deficits would have been just as high, and potentially higher by foregoing so much tax revenue.

You also place to much blame on a cause simply because the word government is attached to it.  Its really easy for something to have been a cause of a problem.  Hell, if it wasn't for the Declaration of Independence and the Constitution none of this would have ever happened.  But the important thing is determining the LEAST REMOTE cause for a phenomenon, such as the wholesale securitization of the mortgage market and lenders making loans that they actually knew were bad because they could resell them.  If you want to blame the Fed for not regulating those, its totally fair, but its simply intellectual dishonesty to claim that the banks weren't the culpable parties here.

From a few posts up:
"Congress runs the economy, not the President. 8 years bla bla bla is just party bullshit. Dems have been running the economy for 3 years, and done nothing worth a shit yet (just like the republicans before them)." 

The governments job is to protect it's people. A banks job it so maximize profits. I blame the government for not doing it's job. Not the banks for doing theirs.

In a perfect world, there would be no sub prime lending, and regulation would exist so banks could not make money by taking advantage of people. The government program not only didn't protect the people from this kind of lending, it rewarded banks for doing it. 

Not when that jeopardizes their long term profits. Publically owned banks have the duty to protect their shareholders' value, which clearly didn't happen if you look at the current valuations of these banks.