Something's Gotta Spend

This post is a follow-up to "A Little bit of Socialism Never Hurt Anyone." In wake of the financial crisis and the economic downturn that has plagued this country and the world, it has been reported that spending is down to its lowest level since 1980. As you may or may not recall in 1980 the state of our economy was the closest thing this nation has experience since the Great Depression. It would take a while and Reagan to do many un-Reagan things to get out of it.

Not only are we spending less, but our economy is shrinking. The GDP has actually shrunk by .3% and is expected to shrink as much as 2% before things start to get better. Now, I don't think we are headed for something analogous to the Great Depression, but it certainly will be similar to the recession of 1980. Now how do we make the best of this situation?

Well first we have to look at history and who and what this nation is. The fact is we are a consumer based nation and with spending in a downturn like this, it seems hard to imagine things getting better anytime soon, but if we are to shorten this recession, someone has to spend. During the initial years of the Great Depression, Herbert Hoover placed this responsibility on us, the consumer. How did that work out? Not well at all (depression got much worse).

Franklin Roosevelt decided that the government would start to spend more and by doing this things began to get better. Granted, the production that came with the war would be the silver bullet, but had it not been for the New Deal, our capacity to prepare for war would have been significantly smaller. So now we need some spending, and we aren't doing this. The next president must surely recognize this otherwise it will be tough. Not only should the government invest in our economy, but at least some of this funding should be through higher taxes for the wealthy. This may sound like a little bit like socialism, but when the country has been governed with far-right policies, the much more left policies would help to balance.

These policies at some point should return to a more centrist once the economy is stabilized. A more centrist policy will encourage more consumer spending and with a little bit better regulation, our markets won't take such downturn for a while. And that's the truth.