>>The private sector brought on the depression of 1929 and the great recession of 2008.
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>Bill, while you can always put 10 economists in a room and get many opinions, the prevailing explanation for the start of the Great Depression is horribly reckless credit expansion by the Federal Reserve (initially pushed by the Coolidge administration). Ironically, one of the goals of the huge credit expansion was to artificially adjust prewar exchange rates w/respect to the British pound. Some view the huge spike in bank credit expansion in 1924 as the "actual start of the New Deal". A few years later the Fed (again, pushed by the federal govt) enacted a second increase in money and credit that jacked up stock prices, railroad stock, the value of mortgages and real estate, etc.
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>Money and credit expansion ultimately increase business costs. The federal government's initial response was to inject MORE money, until the fears of intense inflation become obvious. Of course, by then it was too late, and you had all the rampant selling leading up to the crash.
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>But the crash was only part of the story. Hoover ordered deficit spending and increased borrowing and urged businesses NOT to cut prices, but rather to increase wages. This further affected the ability of the U.S. to recover from the crash.

Now could you PLEASE educate Krugman and the others argueing for money expansion and more deficit spending for Greece and other EU countries ?