No return to normal: A solution to the economic crisis

Abstract

James Galbraith offers a critique of the models used by the United States government to project economic activity, which have been used to determine the scope of the economic stimulus package.  For Galbraith, the use of such models, in addition to the selection of the new president’s economic team and the decision to undertake reduced anti-crisis measures, has contributed to the establishment of misguided government policies.  Taken together, these factors conform a negative panorama that demands the consideration of very different actions and policies.  The author assesses the measures undertaken by president Roosevelt during the thirties under the umbrella of the New Deal, including the physical reconstruction of the United States that was achieved in a short few years and at a minimal cost through massive employment programs, which were uniquely effective in lowering the unemployment rate.  Based on these experiences, Galbraith traces an alternative strategy and economic model for the United States.