■Larry Lang 

The financial tsunami now is just as the one in 1929, when the value of American stock market fell straight from $89.1bn to $15bn, declining by 80%, and the unemployment rate reached 16%. It was under such a terrible situation that Roosevelt,  the great President who was widely considered to have saved the economy of America, came into office.

That's what I was taught during college in America. The teacher then told me about how Roosevelt saved Amerca's economy. He said that there was such a large unemployment population that things were really serious. Since the government hired several workers to dig a hole and stuff it up afterwards. The once shut down bakeries reopened because the hungry workers went to buy some bread. Then the factories of flour, sugar, firewood and coal all started up again, for the bakeries needed flour, sugar, firewood and coal to bake bread. Therefore, those factories had to hire more wokers to meet the need of their products. The workers who got paid had money for beafsteak again, and, as a result, beaf butchers shops reopened. With one linked with another, as you can see, the process of workers digging and filling holes leaded to bakeries reopening and flour factories restarting. The demand of delivery of flour then stimulated the logistics industry to restore. At the same time, famers' desire to work is also lit up. The same thing was true of sugar, firewood, and coal. One by one these industries got stimulated and began to rise up. In this way, there was a increase in employment and consumption. People were more inclined to buy bread and even other things like butter and jams. The economy of America restored through such a series of complicated chain reactions.

After dozens of research, it's found that the story I tell above is not true at all. Why? Let's have a look at the economy of America from 1929 or 1930 to the year before World War II. The unemployment rate was 16% in 1930. It increased to 17% 10 years after that. To be more precise, it rose from 15.9% to 17.2%. However, the unemployment rate was just 3% before 1929, when the Great Depression hadn't come. In other words, Roosevelt's policy of digging holes failed to increase the unemployment rate during the prewar time.

Furthermore, the ratio of private investment to GDP, which was once 16% around 1930, dropped to 14%. What's worse, another great depression called Roosevelt Depression in history, hit America in 1938. The depression lingered over America till a couple of years before World War II broke out.

Therefore, the story told by my teacher is totally wrong. You wanted to restore the economy just by building and destroying several highways or digging and filling some holes? It is impossible. The economy system was very complicated. It couldn't be denied that some industries were affected by those highways, bridges and holes. However, with only a few industries affected, it made little difference. At the same time, the wages of those builders and their consuming capacity were so low that depending on them to buy bread, it was impossible to stimulate the industry of sugar, flour, coal and firewood. At last you would find that it was a daydream to fuel the economic growth by investing in infrastructure or digging holes. At least Roosevelt failed in this way.

Instead of so-called fueling the economic growth on the salary of middle and low-income population , Roosevelt made the life for them even harder by raising the tax from 24% to 79%, which meant that you had to pay $79 out of $100. Who would be willing to invest then? No body. Why did the government tax so heavily? It was because a great amount of money had to be put in infrastructure and public onnstructions, and more and more tax would be needed to meet budget. Thus, a vicious circle was made and contributed to the Roosevelt Depression in 1938. 

How on earth did the economy of America recover? The most important reason lay in America's participation in World War II. Don't listen to the excuses like democracy or freedom. So what was the true answer. In my opinion, it was that the economy went beyond rescue. With 17% of the population unemployed, it was better to send them into army, otherwise it would cause social unrest. All kinds of products were consumed very fast in the war. For example, a plane was much more than a machine. Instead, it was made up of screws, glass, plastic and so on. As a result, the demand in war was far more than buying bread with the salary of hole-diggers, and the range was much wider as well. It created demand for the whole industry of America, which was involved in mading a battleplane. The great increase of demand broght by World War II saved America's economy. 

Many people will ask "Do you think America will start a war to solve the problem?" I don't think so, for it is a different time now. It will be not easy to start a war. To meet the 62-trillion-dollar budget, America has to start another world war instead of just attacking Iraq or Iran. Without such a war, how can America find a solution? It is said that is why President Obama's hair turn grey?