Listening to CNBC I was led to believe this a great thing because, "Bernanke is an expert of the Great Depression". Lets just say I am disappointed this "expert" was not able to foresee the "Great Recession". Remember subprime was "contained" several years back.
The other news is Bernanke and others (Krugman) continue to worry about a W shaped recession and a repeat of 1937. In order not to repeat 1937 it is believe that monetary policy must remain loose and there needs to be more fiscal stimulus. Interesting these students do not remember what ended the Great Depression. What ended the Great Depression was WWII. While no one recommends a war to end the recession lets think about what occurred because of WWII. WWII was one of the greatest production and savings events in the history of the country. The saving was due to rationing, but regardless there was savings.
The cures floated for the "Great Recession" have been quite the opposite. The first was the $1,200 stimulus checks under George Bush. Obama followed this with a smaller check in 2009. Bernanke continues to buy up ABS. There was cash for clunkers and there are first time home buyer credits. The FHA and Ginnie Mae continue to lower credit standards. In other words the proposed cure for the Great Recession is government sponsored debt and spending. The opposite of the cure of the Great Depression, production and savings.
Perhaps in order to end the Great Recession we need new Blue Laws not government sponsored debt.
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