Different things require a different approach

We should not compare the time of the Great Depression and his theories with Nowadays. These are two completely different situations. A closed economy in the 1930's and a fully open and unbalanced economy as it is today. Back then, the US had a closed market and the country was mostly self sufficient. Most goods were made within the country's doors and the main global financial markets weren't that interconnected, as they are today, and also, financial capital wasn't so volatile. But during the last decade, the US is running high external deficits, accumulating budget deficits and running extremely low savings rates. What the US have created, nowadays with all the QE's towards finance, is an asset bubble, that will go away when the QE's stop.

Ben Bernanke is wrong, just as it was his predecessor Alan Greenspan. Unregulated markets will only serve the most powerful side of the Market. Basic regulation is needed. More QE money in an unbalanced economy, will only flow away from the US economy, towards the creditors and to all the fiscal paradises around the world. In fact this is already happening. The money will not stay in the US, and the country will end up funding the entire world before entering default. The difference this time will be that this time, there will be no federal reserve to save the country, because, the dollar, among other reasons, will be worthless.

By the way, concerning the main issue, Debt is bad for Growth. More debt will create harder conditions for the economy and for the tax payers. It is not possible to run continuous deficits and ever higher amounts of debt, systematically. This is a fact. We should not try to grow with more unsustainable debt. First we have to clean the house, work harder and better. Balance our budget and build a unique QE supported by the central bank, towards the working economy, directly to the entrepreneurs and to the companies that are responsible for the creation of jobs and value added products, and the building of a new Economy, more self sufficient and balanced than it is currently. A QE should not be for finance as it has been happening during the past 3 years. Then in due time, good results will arise in a sustainable environment, towards the People and for the Country.

The following Note and Links were added on, June, 4th, 2013.

Get Pass through the "Reinhart and Rogoff error", don't get stuck with the info overload, and, get your hands on Real and Concrete Data. This is not about the 90% limit. This is about the economy, ex: during the last decade what were the results on the following macro-economic data:

It is not one item, but it is a mixed set of macro-economic data, that will build

 the Advanced Warning System (AWS)

Budget: primary balance, did a country accumulated deficits or surplus, and to what extent. How did the budget behaved during the years of positive growth and the years of recession.

Growth: throughout the last decade (at least) what was the Real GDP rate of Growth!?

Debt: Had the country accumulated one of the highest debts (in % of the GDP) !? and the way the country behave during the years of growth (concerning gov.debt) and during the years of recession.

Balance of Payments: An overall analysis is needed to access if the country, as a nation, has the ability to sustain a shortage of money and continues to refinance it self. What did the country accumulated during the past decade.

Savings: How did the savings rate behaved during the past years.

Trade: During the last decade, has the country accumulated deficits or surplus's.

This set of data will develop and allow the creation of an Advanced Warning System (AWS) that will inform you about the sustainability of a country's economy and their ability to sustain an external shock. Evidently, this AWS will not prevent the wrong doing's and the out of the law operations, as well as, the development and creation of asset bubbles, because they (the former) will eventually burst, somewhere, somehow and sometime, along the line.

The economic analyse that derives from the guidelines presented above, indicates that the following events were certain to occur:

This is the reason why Portugal and Greece, failed to avoid their crises, and their recessions.

The Spanish crises / recession, besides their accumulated surplus on the budget, prior to the start of the financial crises, didn't manage to save them from the recession, mainly because of the asset bubble in the housing market, alongside with bad loans and risky investments / operations made by their banks.

The crises followed by the recession in Ireland, was due to the asset bubble in the housing market, mainly.

The Icelandic crises, was due to their close relation to the USA derivatives market and risky asset dealing, mainly.

And it is also the reason why China, Australia, Germany, Sweden, Finland, Denmark, Netherlands and Luxembourg (besides his massive external debt), among others, have passed through the ongoing crises, with less bad effects than most of the other countries.

Unfortunately, it is also the reason why, the USA, the UK and Japan, are under tremendous pressure, and will enter into an uncontrolled default situation, if they don't change their approach to the real economy and to the economic variables presented in this AWS.

Some working papers that will enlighten this issue, a bit further:

The Reversed Sustainability effect, February 2012

Paper developed by Luis Beldroega and presented @ "Economics - the Power of Numbers"

Macroeconomic Policy and Economic Stability, April 2013
Paper: Comments by William White on the Presentation by Lord Adair Turner
http%3A%2F%2Fwilliamwhite.ca%2Fsites%2Fdefault%2Ffiles%2FINETTurner.pdf

BIS Quarterly Review, June 2013

Paper: Markets under the spell of monetary easing
http%3A%2F%2Fwww.bis.org%2Fpubl%2Fqtrpdf%2Fr_qt1306a.pdf

Lessons from the crisis

OECD Journal on Budgeting