The General Glut Theory

DeLong claims it exists, I claim it does not.

The economy does not have complete solutions to inventory mis-match problems, so inventory cycles remain and must be dealt with. The economy deflates, or contracts, for a period and builds up surpluses, then inflates for a period. over time we get the balance.

We entered the depression because of a severe shortage of oil. We contracted beyond that necessary to correct, because it was the closest solution we had. We will attempt to re-inflate when oil inventories build up.