Unfortunately economists are being ignored by the neocons! I was told by a former board member of the fed that fiscal policy is politically out as an economic tool. Monetary policy alone cannot do the job
We used to have some built in stabilizers but they are being destroyed by greed and ignorance. Discretionary policies are also being eliminated. And I wonder if any recent MBA's know about the the CEA set up by the Employment Act [which was originally the Full employment Act before congress knocked the Ffull out of it
<<1. are you aware that banks had excess reserves equal to one fourth of the GNP during the depression and very little money was being demanded as loans from the banks?>>
You have inadvertantly proved my point. People were too scared to spend money during the Great Depression in the US and thus could not be brought to kindle inflation.
I admit that I do not know Germany's history well enough to even comment on the inflation that ocurred there during the 30s, as you have stated. I suspect this may not be entirely accurate because all countries are afraid of repreating events of their past. We are scared to death of another Depression and Germany trembles at thoughts of the Weimar Republic's hyper-inflation of 1922-23. Nonetheless, you may know something that I do not. I will have to research it.
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