Tom, you haven't addressed the primary causes of a recession/depression, namely a market bubble that escapes regulatory control and then subsequently crashes. The Great Depression was triggered by runaway real-estate speculation, if I recall. So was the recent recession.
The 1920 depression, on the other hand, seems to have been triggered by the abrupt transition from a wartime to a peacetime economy following World War One
, combined with the recent adoption of the Federal Reserve system and the transition from a gold standard. I don't see "evil Democratic regulatory policies" listed, although that could just be because Wikipedia insists on an unbiased presentation of data, unlike some of us. It also lasted for a very brief period of time given that it apparently had no "real" causes. I note in addition the following item: "Since the 1920-21 recession was not characterized by any aggregate demand deficiency, fiscal stimulus was entirely unwarranted."
The problem now is
one of demand, which is not self-correcting quickly enough under the current conditions — namely increased productivity combined with a prolonged slump in housing and tightening of consumer credit.
Back on topic, you don't help people recover from a disaster by starving them to death. Investment in disaster recovery is direct investment in economic recovery.
edited 26th May '11 12:16:55 PM by Fighteer