The history of 1929 crash has shown that stimulus is the best medicine for financial turmoil.
Austerity was the first medicine prescribed by president Hoover and it failed. FDR initially provided stimulus but he had to abandon those due to political sentiments similar to the ones you echo. What finally ended the depression is the stimulus from the overwhelming spending on WW2.
Whether stimulus triggered by war or via the fed, its the only way to resolve financial turmoil. The time to address deficit/debt is when the economy is strong, as was done in the mid to late 90s.
The alternative view is that FDR made the Great Depression great, with arbitrary orders like NIRA and attacks on business. He ruled for four terms and the Depression coincidentally lifted after his death. Out of necessity business was given a freeer hand during the war, sort of like Lenin's NEP in the 1920s. With FDR's death that free hand continued. Read "The Forgotten Man" or John T. Flynn if interested in this point of view.
By the middle of his second term, much criticism of
Roosevelt centered on fears that he was heading toward a
dictatorship, by attempting to seize control of the
Supreme Court in the Court-packing incident of 1937,
attempting to eliminate dissent within the Democratic
party in the South during the 1938 elections, and by
breaking the tradition established by George Washington
of not seeking a third term when he again ran for re-
election in 1940. As two historians explain, "In 1940,
with the two-term issue as a weapon, anti-New Dealers...
argued that the time had come to disarm the "dictator"
and to dismantle the machinery."[1] These criticisms
largely ended after the Attack on Pearl Harbor.
In key respects, Pearl Harbor was to FDR what 9/11 was to Bush. It shut down criticism and gave him two terms.
Because victors write history, we need to be skeptical of presidents surrounded by war propaganda, whether Bush or Obama or FDR. Did a president lead us through war and depression? Or did he get us into war and turn an ordinary recession into a depression?
Stimulus has to go on stuff that has lasting value greater than the value of the stimulus. That is the mistake that Gordon Brown made - you can't just slosh money around. The WW2 stimulus worked because when the dust settled, there was an industry expert at mass production, a trained and disciplined workforce, and a pent-up demand for exports.
In other words, what is at least as important as how much. You can't just blindly spend your way out.
Austerity was the first medicine prescribed by president Hoover and it failed. FDR initially provided stimulus but he had to abandon those due to political sentiments similar to the ones you echo. What finally ended the depression is the stimulus from the overwhelming spending on WW2.
Whether stimulus triggered by war or via the fed, its the only way to resolve financial turmoil. The time to address deficit/debt is when the economy is strong, as was done in the mid to late 90s.