• You can’t spend your way out of a recession: Of course you can. We did it in the Great Depression, Reagan did it, and it’s what we should be doing right now (instead of bailing out the financial industry, wasting time with Quantitative Easing, and trying to balance the budget). Why this works should be obvious from the backdrop offered above. Businesses will regain confidence, consumers will spend, and banks will loan. So, yes, you can spend your way out of a recession because a recession is caused by lack of spending.