beware of cutting back on stimulus too soon

«Fiscal policy , though less expansionary, was also helpful. Indeed, in 1936 it was inadvertenly stimulatory. (...) This caused another one time rise in the deficit of more than 1,5% of GDP.

And, the economy responded. Growth was very rapid in the mid-1930's(...).

The economy was road to recovery, but still precarious and not yet at a point where private demand was ready to carry the full load of generating growth.

In this fragile environment, fiscal policy turned sharply contractionary. (...) As a result, the deficit was reduced by roughly 2,5% of GDP.

(...)

The results of the fiscal and monetary double whammy in the precarious environment were disastrous. (...) Policymakers soon reversed course and the strong recovery resumed, but taking the wrong turn in 1937 effectively added two years to the Depression.


in Christina D. Romer (2009) Lessons from the Great Depression for Economic Recovery in 2009