People are prepared to pay for peace, law, and security, all of which are actions that merely "limit loss and destruction by preventing acts of aggression". Therefore those actions create value - if there were no value created, no one would pay anything for it. According to your logic, a country without war is no better off than if it fights a brutal war. No further comment is needed as to the credibility of your claim that no value is created. Insurance companies only pay out money in the event of loss, and the payout is usually below the loss. Do they create no value either? If so, why do millions of people freely pay money to insurers in return for protection?
Well, to be fair it is difficult to say with such precision. Very few recessions last more than 3 years in a row. I agree taking the US off the gold standard helped a lot, just as devaluing the £ in 1992 helped (albeit in less serious circumstances). I have no problem with FDR devaluing, or trying to stabilize the banking system in 1933, and think this contributed to GDP climbing back. My point was more why unemployment stayed so high for so long. And also things which were clearly dumb, like forcibly burning farmers crops in order to shore up commodity prices, one of the most ludicrous ideas ever to see the light of day, during a time when people were literally starving. I by no means paint the FDR era with a broad brush, but IMO it's pretty undeniable they did some dumb things, and things like double digit unemployment for a decade seem to bear that out.
I wonder how the invention of television and all of the changes it brought to society helped stimulate the economy.
Well, you are citing PPP-adjusted GDP, which is not a particularly accurate reflection of economic performance, especially during periods of wild currency fluctuations. For example it shows Brazil with positive growth in the early 2000s, whereas in fact they had an economic bust, albeit not as bad as Argentina's. Just look at asset prices (real estate, stocks, bonds, currency) or wages if you don't believe me. Nor is a current account deficit, which is after all simply the inverse of a capital account surplus, a good reflection of economic strength or weakness. The US has had a current account deficit throughout the 1980s and 1990s, Europe has a surplus, yet the US had lower unemployment and higher dollar GDP growth during that period. Any country which attracts lots of foreign investment (a sign of strength) will tend to have a capital account surplus and thus, by necessity, a current account deficit - and vice versa. My comments on Brazil and Argentina are not reflecting anyone else's opinions. I researched both countries, spoke to businesspeople there, and invested in Brazil in the beginning of 2003 based on what I read, heard, and saw. So yes, that is how I do my trading - and my purchase of Brazilian stocks turned out quite well, thanks. How about you, did you put anything in there? Do you even trade for a living? If not, then perhaps a little more humility would be in order. Learn to walk the walk before you talk the talk.
Moot question. Perhaps wrongly worded, because while the Depression did end, the Austrians don't believe it was "ended" in the most effective way. Austrians believe that the Great Depression could have been just a "Depression" if it wasn't for the Fed's tightening of the credit supply, a HUGE mistake that totally contradicted the motive for establishing the Fed in the first place - which is to secure economic stability. (perhaps it wasn't a mistake at all, if viewed from a conspirational point of view of the reasons for the creation of the Fed) Furthermore, Austrians believe that the GD could have overall even been avoided if it wasn't for the Fed's pre-GD pumping up of the economy with excessive credit which played a significant role in making the "Roarin' Twenties" what they were. Overall, I have to agree with the Austrians. The Fed's done nothing but harm to this country in the long term, and I believe its abolishment would pave the way for a more stable economy in the long-term through the institution of no monetary policy at all and a return to some form of commodity-backed money. I believe what we see right now going on in the political sphere is the making of the last and final economic bubble which, while at first will be passed off as a new beginning for economic prosperity, will cause the inevitable total collapse of the U.S. economic and perhaps political system within the next decade.
The difference in our opinion stems from our concepts of wealth. You define it as "value," or a person's perception of wealth. I concede that type of wealth does increase with the feeling of security provided by the government or an insurance agent. This kind of wealth also increases when a superficial woman finds that perfect $1000 designer handbag. She has found her own value. My concept of wealth is narrower, I suppose, something like: materials and technologies that support human survival and mastery of their environment. Given my definition, I still maintain that government does not increase the net quantity of wealth, but only aids in preventing its destruction, and may foster an environment in which allows additional wealth to be generated.
From what I can gather Austrian economics has no strategy whatsoever when it comes to combating a deflationary spiral. It's all leave the market alone since it knows best or blame the Fed. Of course neither explanation comes close to adequately giving reassurance. One only needs to look at the succession of financial panics in the late 19th century. No surprise Keynesian economics rose to prominence while Austrian economics languished. Economically speaking wealth is goods and services. Goods and services are created by employed workers. Generally speaking employed workers leads to more goods and services and increased wealth and higher standard of living while unemployed workers don't. Money/credit is important in that in makes otherwise unproductive labor and assets more productive.
Too bad the Austrians never figured out, "If you don't screw with the money, you'll never have to worry about a deflationary spiral... no inflation = no deflation".
How do you prevent screwing around with the money? The gold standard? Didn't prevent financial panics in the 19th century.
Forget about the 19th century, in the 20th and 21st century, the problem is central bankers. To prevent screwing around with money, simply don't make make too much, stop m1,m2,m3. There should only be one currency.