If I get another email opining on how WWII, not FDR's stimulus pulled us out of the depression I'm going to...uh do something.In the instance you're a friend of mine who's sending me these emails or just your garden variety parrot co-opting this thesis at dinner parties here are few digestible points to consider:
1. In 1941 war spending WAS deficit spending
2. The WPA shaved 6+ points off unemployment from '32 to '36. Seriously. That's 6 points in the middle of the worst economic crisis the globe had ever seen.
3. There was a massive draft, that SEVERELY depleted the labor pool. Don't understand? Try this. If Culverania has 100 citizens, of which 20 are unemployed the unemployment rate is 20%. If they draft 15 of those to go to war with the country Ryanstan, their unemployment rate is now 5%. Magic? Not quite. Since those 15 citizens...err...Privates are now paid by the government, it's govt spending!!!
Considering the upswell in WWII as Great Depression buster myth it seems like we're down to two options to bust this Greater Depression (or so categorized at a later date).
A. Massive war - world style - in which tens of millions of people die, hundreds of billions of assets are destroyed and trillions of govt dollars are spent
B. Gargantuan stimulus that avoids tragic dislocation of epic proportions and that impending visit from Klaatu.
I vote B.
