Date Added: Aug 2009
This paper comments on the experience of the U.S. economy in the 1930s, its lessons for managing the current economic downturn, and the relation of U.S. economic conditions to the future national security. Some of the conclusions are: Although the current recession will be long and very damaging, it is not likely to deteriorate into conditions similar to the Depression of the 1930s. The focus on domestic economic policies in the 1930s and the desire to remain militarily neutral delayed the major military buildup that eventually achieved the economic recovery. A well-functioning system of bank lending is necessary for economic expansion. Raising taxes, even future taxes, can depress economic activity.