Alternate timeline of the 1930's.

[Free Trade is managed by the invisible hand.]

It is the year 1930 and the Great Depression has already turned the entire USA into an economic sh**t pile. With annual rates of 2% deflation, U6 unemployment in the 35%-50% territory, and big ass drops in GNP...The world stands on the brink of ruin. On top of all this Darkseid has traveled back in time and has assinated John Maynard keynes, FDR, John Kenneth galbraith and almost managed to kill superman.

Fortunately time in its infinite wisdom created a rift in the space time continuum and has sucked you through a temporal time portal. Eventually you get elected to office and you become the 32nd president.....What do you do?

*quite simply what would you do if you were the 32 president

[fezzyfestoon]

Tax the sh**t out of the rich and spend it on floating the manufacturing sector in a similar way we just did with the financial sector.  I might also cut imports to give a little boost to wages.  That would be my insanely vague initial reaction.  The key thing is that I would implement my changes TEMPORARILY and with caution.

[Bo]

I would massively increase govt. spending by 100 times and make sure that most of that money does towards infastructure, industry, and consumer spending. I will also make sure that the American people are more confident in the economy by delivering fireside chats. Finally, I will raise taxes on the rich, with the highest marginal income tax becoming 95%.

[Free Trade is managed by the invisible hand.]

shoot i better bring in my policies

1. Get rid of the Gold Standard
2. Talk about cost push inflation so we could avoid "double digit" inflation in the 70's.
3. who was that guy who preceded Keynes by like 16 years? Anyone remember? Because I would hire that dude.

[Bo]

shoot i better bring in my policies

3. who was that guy who preceded Keynes by like 16 years? Anyone remember? Because I would hire that dude.

Ludwig von Mises?

[Free Trade is managed by the invisible hand.]

shoot i better bring in my policies

3. who was that guy who preceded Keynes by like 16 years? Anyone remember? Because I would hire that dude.

Ludwig von Mises?

Lol no.

Alright someone said that they would primarily spend in industry,but we now know that steel was badly damaged in the 1958...due to overproduction. Thus it would be wise to spend on more than just industry,but technology was limited and such things as "alternative energy" were not seen as a neccisty or even a possibility.

[Obnoxiously Slutty Girly Girl]

Have the Federal Reserve abolished, cut taxes, cut spending, restore sound fiscal policies.

[Free Trade is managed by the invisible hand.]

Have the Federal Reserve abolished, cut taxes, cut spending, restore sound fiscal policies.

what would the effects be if we did that? plus what would be the point of abolishing the reserve if we already know what economic conditions are going to occur in the future?

[Obnoxiously Slutty Girly Girl]

Have the Federal Reserve abolished, cut taxes, cut spending, restore sound fiscal policies.

what would the effects be if we did that? plus what would be the point of abolishing the reserve if we already know what economic conditions are going to occur in the future?

The economy would be in bad shape for about a year, after which a true recovery on solid ground would begin.

[Mint]

Nationalize the fed, begin rural electrification and infrastructure projects funded through various means (perhaps partial gas nationalization or some sort of consumption scheme), establish unemployment insurance and tax free savings plans. But that has less to do with combatting the depression than just bringing parts of the country up to fully developed status.

[Free Trade is managed by the invisible hand.]

Nationalize the fed, begin rural electrification and infrastructure projects funded through various means (perhaps partial gas nationalization or some sort of consumption scheme), establish unemployment insurance and tax free savings plans. But that has less to do with combatting the depression than just bringing parts of the country up to fully developed status.

What do you mean by "nationalize the fed", and a tax free savings plan?

Just for the record if anyone is concerned about the Fed I would say that their record is more impressive from the 1960s onwards. Obviously the Fed has made a few mistakes,but economics was still in its infancy when the institution was created, and major modern advances in the field did not occur until the 1950s. Now obviously monetary policy has its limitations, for example policy lag for somethings are estimated to be around 6-12 months. On the other hand "open market operations" can effect things overnight, and this is important because effecting the market in an immediate manner can be the difference between a typical recession, and a Great Depression. Obviously the Federal Reserve is far from perfect but it has been rather successful in saving us from stagflation in the 70's, freed us from major inflation in the late 70's, early 80's, and helped to minimized the stock market crash of 87.

Some people have become rather critical of the Feds low interest rate policy and have suggested that the fed played a direct role in creating this crisis. Obviously "sub prime interest" was a bad idea, but changes in the short term interest rate may have had less of an effect than people may think. This is because many other nations had low interest rates as well,but have suffered less severally from the current financial crisis, or not at all(well obviously capital flows have been disrupted for everyone,but that really isn't a result of interest rate policy). It will be hard to come up with an exact number that can explain how much of a role the Fed played,but vector auto regression models suggest that interest rate policy did not have that great of impact on ARM's. Thus the Fed had some role in this current financial crisis, but econometric models suggest that the Fed had a relative minor role when compared to those who overemphasize the role of the Fed in causing this financial crisis.

[Free Trade is managed by the invisible hand.]

Nationalize the fed, begin rural electrification and infrastructure projects funded through various means (perhaps partial gas nationalization or some sort of consumption scheme), establish unemployment insurance and tax free savings plans. But that has less to do with combatting the depression than just bringing parts of the country up to fully developed status.

Rural electrification created jobs, and probably had a positive impact on opportunity cost, and thus it would have a high multiplier effect. Unemployment insurance sounds like a good idea, but I think a lot of that would depend on the elasticity of an economy because such things could impede the speed of recovery if the economy is more elastic than what we may think. Obviously this is more of a problem in developing nations,but I am not very familiar with how elastic prices were "back in the day".

[Free Trade is managed by the invisible hand.]

Have the Federal Reserve abolished, cut taxes, cut spending, restore sound fiscal policies.

New rule, people should start giving a brief explanation as to why they would do such and such. For example I would throw away the Gold standard because countries who abandoned it recovered quicker than nations that stayed on it.

If i were Fed Chairman I would attempt to have an annual rate of 2% inflation, and thus allowing financial agents to build around the rate with 5% interest. Because no supply shocks occurred in that time period such a policy would keep growth steady for quite some time. I could pretend that because I know what will happen in the future, I could do exactly what FDR did but that wouldn't be any fun.

[Electric Feel]

Wealth redistribution.

This would promote consumption and investment rather than hoarding and give the economy a good enough kick start to fix the unemployment problem.

[Mint]

Nationalize the fed, begin rural electrification and infrastructure projects funded through various means (perhaps partial gas nationalization or some sort of consumption scheme), establish unemployment insurance and tax free savings plans. But that has less to do with combatting the depression than just bringing parts of the country up to fully developed status.

What do you mean by "nationalize the fed", and a tax free savings plan?

I'd return their functions to the treasury or just establish an actual national bank with full transparency. I'll address the rest of your points in a bit. As for tax free savings plan I mean a tax-exempt IRA or annuity.

[Free Trade is managed by the invisible hand.]

Nationalize the fed, begin rural electrification and infrastructure projects funded through various means (perhaps partial gas nationalization or some sort of consumption scheme), establish unemployment insurance and tax free savings plans. But that has less to do with combatting the depression than just bringing parts of the country up to fully developed status.

What do you mean by "nationalize the fed", and a tax free savings plan?

I'd return their functions to the treasury or just establish an actual national bank with full transparency. I'll address the rest of your points in a bit. As for tax free savings plan I mean a tax-exempt IRA or annuity.

Returning their functions to the Treasury seems kind of odd,because that would simply mean a merger of the treasury and our central bank? One of the more interesting things about the reserve is that it normally reports a surplus of earnings and will transfer this surplus to the treasury, and thus the reserve has a 0% net cost for tax payers and promotes fiscal responsibility. I am not so sure as to why you want the reserve to be more transparent than it already is? One of the reasons as to why the Fed's proceedings are not fully disclosed is because the institution was created in order to maintain political indepence, but also as to not upset the market.

In any event if we were to radically change our banking system we should probably adapt Canada's system because it is considered to be the best in the world.

I am guessing that you would want the treasury to start issuing bank notes again, but what would they than be backed by? Obviously it couldn't be nothing!  Take out a dollar bill, read that it is "backed by the full faith and credit of the US." That isn't just garbage, or blind faith, or something. It means that you can use your paper money to buy t-bills [a commodity like gold] and you can always sell those t-bills and convert them back into liquid money. Their can never be a run on the t-bills like a run on the bank, to make the government crash. Because the government has the power to levy taxes to repay its debts.

I been kind of bored so here goes another round...
I am guessing that if were to put the treasury in charge of issuing bank notes than i am assuming that it could only be backed by gold?  if this were true than our wallets would turn into portfolios and our dollar would become susceptible to speculative attacks! one merely needs to look at the Gold Bubble in the 80's, and it would have been painfully clear that if we had stayed on the Gold Standard our dollar would have crashed.

//tax-exempt IRA //
why?