New Deal Spending:
"Devaluation followed by rapid monetary expansion broke the deflationary spiral."
[T]he US economy grew by 11% in 1934, 9% in 1935 and 13% in 1936 in real terms. This lulled the authorities into thinking that all was well with the system again. Hence, in 1937, the deficit was reduced by approximately two and half percent of GDP. Monetary policy was also tightened, as Romer notes "The Federal Reserve doubled the reserve requirement in three steps in 1936 and 1937". She concludes "taking the wrong turn in 1937 effectively added two years to the Depression".
[T]he growth between 1933 and 1937 was the highest we have ever experienced outside of wartime. Had the U.S. not had the terrible policy-induced setback in 1937, we, like most other countries... would probably have been fully recovered before the outbreak of World War II" This is a reminder that the current obsession with no scenario being too pessimistic is probably ill advised.
("Roadmap To Inflation And Sources Of Cheap Insurance," by James Montier. Cross Asset Research, Societe Generale. March 2009.)
That was James Montier quoting Christina Romer, head of the Council of Economic Advisers, and adding his own comments.
Tell the liars you see right through them. You have the facts above.