The economic recovery and you: Is 2010 going to be 1937 all over again?
The hint of economic recovery has led many to breathe a sigh of relief—we’re on the way out of the recession. Big banks are paying back bailout funds. Even GM appears to be doing better than expected.
Maybe Obama’s massive stimulus is working. (Or, say its critics, at least it hasn’t made things worse.)
Economist Paul Krugman fears that these intimations of economic recovery are leading Congress and the White House to conclude, prematurely, that it soon will be time to end the stimulus.
If they do, Krugman says, it will be 1937 all over again.
Back then, Roosevelt caved in to conservative pressures to end massive government intervention in the economy. He pulled back, and plunged the economy right back into the Great Depression.
History will repeat itself in 2010 if the stimulus plan is not renewed and extended. (Read Krugman’s New York Times article here.)
Why would history repeat itself? That’s an issue Krugman doesn’t tackle. It’s not simply that we forget the past.
The reason is this—a limited government is a dominant ideal in American society. Always has been, and probably always will.
Conservatives feel more strongly about this ideal than liberals do, but the ideological differences between them are not that great. The vast majority of Americans prefer a limited government. That’s why it will be easy to slip into a premature end of the stimulus plan.
What do you think? Do we need to renew, extend, and expand government intervention to really get us out of the economic woods?