Financial crisis now and then

Abstract

Keynes, the British economist, says the state should intervene in the economy: infrastructure needs to be developed, public works have to be organized and social politics are to be improved. If all of the above are achieved, there is a chance of keeping the economy in balance in a time of crisis. In the Great Depression of 1929-1933 Roosevelt’s New Deal programme helped the United States to recover from the crisis, conduced to preserve civil democracy and laid the foundations of the welfare state. The so-called sub-prime crisis that began at the end of 2006 represents the culmination of a super boom that started more than 25-years ago. The variable intensity financial crisis originating from the real estate and banking sectors resulted in the decline of the U.S. economy; its slowing economic growth has an impact on the whole world’s economy. Therefore, the question is whether there is any way out of the current global economic crisis, like 80 years ago.