Even before the Great Depression, downturns were typically much deeper and longer than they are today [and, conversely, booms were more spectacular – TF]… One reason why recessions have become milder is higher government spending. In recessions governments, unlike firms, do not slash spending and jobs, so they help to stabilise the economy; and income taxes automatically fall and unemployment benefits rise, helping to support incomes.
The article adds:
A recession triggered by tight monetary policy can be cured by lower interest rates, but fiscal policy tends to be less effective because of the lags involved. By contrast, in a depression caused by falling asset prices, a credit crunch and deflation, conventional monetary policy is much less potent than fiscal policy.
All of which suggests that letting public borrowing shoot up over the next year or so is the lesser of two evils. Cant about a “debt crisis”, while satisfyingly moralistic, is beside the point in deciding what to do now.