Steve Kates is at it again.
In this ignorant rant he says this.
'The European economies, and Australia as well, emerged from the Great Depression faster than we have today because they used classical theory and policy to work things out. The UK famously balanced its budget in 1933, at the very trough of the Great Depression. We cut spending here in 1931 and was the first economy to come out of the Great Depression with the Australian trough being reached in 1932 from which time things continually improved.'
Okay , let us examine the US under Roosevelt. When the New Deal was implemented the US experienced growth of nearly double digits. The US then went into recession when Roosevellt adopted classical economics and performed the largest fiscal change in his administration. Yeah that's right the largest change in fiscal policy by Roosevelt was not deficit spending but getting the budget into the black.
Now Australia we examined here. Please note what happens to the economy after the balanced budget of 1931.
After GROWING at 1.7% it then reduces GDP by 2.6%.
Thus Steve joins fellow Catallaxy writer Julie Novak as a complete liar about Australia in the Depression.
Please note the reasons for the recovery. nothing to do with classical economics indeed quite the opposite!
Australia's unemployment rate never got below 8%. sound like full employment to you. no not to anyone literate in economics actually.
Steve actually doesn't mention Germany. The ONLY country to get to FULL employment following the Depression. I wonder why?
Poor old Bruning. He followed those classical economics policies advocated by Hayek and it brought disaster and worse. Hitler.
so the ONLY advertisement for classical economics is that it gave us Hitler.
It is no wonder Steve is mad!
just as an added bonus.
The official costs of Austerity in europe!
Really is there any further evidence people at Catallaxy are brain dead. ( Thanks Steve from Brisbane)