Judge Andrew Napolitano asks.....

[NoStateofMind]

What caused the end of the first Great Depression?

Would the answer be WWII?

 

[Fear No Evil]

Out of control borrowing?

 

[nick1985]

Obama

 

[xj0hnx]

We just need to spend more, obviously we haven't spent enough ...duh.

 

[airdata]

investing in bombs would be a possible solution. But then we run the risk of having somebody turn us into ashes.

 

[rudder]

You can't really compare the situation then to possible solutions today. Sure the government spent money that was borrowed. And the U.S. economy boomed after the war... You need to look at the manufacturing capacity that was increased, desire to own automobiles, airline industries, new markets, etc that resulted from WWII.

 

[Atreus21]

This is not the second great depression.

 

[jackschmittusa]

Having enough jobs ended the Depression (WWII created a lot of jobs which helped a lot). Enough jobs meant everyone bought stuff. Most of the stuff they bought was "Made in the USA" which kept the job cycle going.

 

[Genx87]

Honestly there is no concrete answer. But a theory is pent up savings due to rationing during WWII that was unleashed on the economy post war. I'd also venture a guess being the worlds manufacturer helped as well.

 

[Phokus]

The countries that got out of the gold standard the fastest were the ones that recovered from the GD the fastest. True story.

This is also known as the 'libertarians are fucking stupid and should never talk about money' law.

 

[trenchfoot]

Honestly there is no concrete answer. But a theory is pent up savings due to rationing during WWII that was unleashed on the economy post war. I'd also venture a guess being the worlds manufacturer helped as well.

That makes sense. Add to that the fantastic position the USA was in where the major competitors on the world market experienced catastrophic damage to their infrastructure and manufacturing capabilities from having war being fought on their soil whilst the USA's manufacturing capabilities was going at full speed and practically untouched by war damage.

 

[DucatiMonster696]

The countries that got out of the gold standard the fastest were the ones that recovered from the GD the fastest. True story.

Most nations had already dropped the gold standard by 1931.

This is also known as the 'libertarians are fucking stupid and should never talk about money' law.

Of course that move away from the gold standard didn't stop the UK from going into economic stagnation after WW2. Furthermore it didn't help that they effectively embraced the creation of the "Welfare State" either which when compared to the US (who basically unleashed the private sector after WW2 and for the most part took their hands off the steering wheel of the economy) was up and running with our economy boom mode.

 

[First]

Spending, and it's irrefutable based on simple mathematics.

 

[matt0611]

The countries that got out of the gold standard the fastest were the ones that recovered from the GD the fastest. True story.

This is also known as the 'libertarians are fucking stupid and should never talk about money' law.

Actually it didn't have to do with "going off the gold standard" it had to do with devalueing the currency. See, "free marketer" hoover convinced businesses not to lower wages which made unemployment high because businesses couldn't afford to higher workers. Devaluing the the dollar from $20.67/oz gold to $35/oz gold allowed peoples real wages to fall. The US remained on a gold exchange standard after that throughout the depression.

The US didn't even go off the gold standard until 1971.

The gold standard didn't cause the depression to last 10 years, extreme government intervention in all levels of economic activity did that. It was only until after the war when a lot of the new deal programs were either unfunded or were ruled unconstitutional and when government spending dropped did the private sector start to grow again.

 

[highland145]

The gold standard didn't cause the depression to last 10 years, extreme government intervention in all levels of economic activity did that. It was only until after the war when a lot of the new deal programs were either unfunded or were ruled unconstitutional and when government spending dropped did the private sector start to grow again.

Thought it started during WW2, 25% budget cuts or similar.

 

[ProfJohn]

Wars like that are good for the economy.

They create employment and spur production. Vietnam did the same thing, look at the economy of the 60s. It was mostly great and when the war ended it went to hell.

Modern warfare doesn't produce the same results. The toys are too expensive and there is too little manpower involved.

We'd be better off with another cold war where we have tons of troops sitting around bases instead of shooting off missiles at a million a piece.

Of course no wars would be better for all... as would full employment... and women with big tits who like computer geeks... if only such a world existed...

 

[matt0611]

Thought it started during WW2, 25% budget cuts or similar.

Well yes, but government spending went into the war machine instead, which produced very little for actual consumers, sure, it produced battleships, bullets, guns, airplanes etc. But average consumer products were all in shortages and were all price controlled by the government.

War is not "good" for the economy. War diverted the US from a lot of the new deal programs and can bring new technologies but that's it. War brings destruction and shortages of goods that actually benefit the consumer. War stimulates the economy the same as an earthquake or a plague.

 

[highland145]

War is not "good" for the economy. War diverted the US from a lot of the new deal programs and can bring new technologies but that's it. War brings destruction and shortages of goods that actually benefit the consumer. War stimulates the economy the same as an earthquake or a plague.

And that's an argument I read that helped end the depression. Massive cuts in the new deal spending to pay for the war.

Give me some time and I'll try and find it.

 

[ProfJohn]

War diverted the US from a lot of the new deal programs

A government can not spend its way to prosperity. All the new deal did was to lessen the pain, but it certainly did not end the depression.

In order to end a recession/depression you need the growth of wealth. Businesses to produce, people to spend, real jobs to be created from nothing.

If I make $4000 a month and give $100 to each of my two kids my family is not $200 richer because of it. Now if I open a bank loan and give the kids $100 each from the loan then we are richer by $200 a month, but eventually I have to pay that loan back with interest which means our total wealth actually goes down long term and once the loan runs out we are back where we started.

But if my kids go out and make money mowing lawns then we become a wealthier household.

 

[matt0611]

A government can not spend its way to prosperity. All the new deal did was to lessen the pain, but it certainly did not end the depression.

In order to end a recession/depression you need the growth of wealth. Businesses to produce, people to spend, real jobs to be created from nothing.

If I make $4000 a month and give $100 to each of my two kids my family is not $200 richer because of it. Now if I open a bank loan and give the kids $100 each from the loan then we are richer by $200 a month, but eventually I have to pay that loan back with interest which means our total wealth actually goes down long term and once the loan runs out we are back where we started.

But if my kids go out and make money mowing lawns then we become a wealthier household.

I'm no supporter of the New Deal, I was just saying the reason why the war helped is that it diverted the government away from the New Deal. My view is that the New Deal helped prolong the depression.

 

[PeshakJang]

WWII had very little to do with ending the depression... The majority of historians have agreed on this after thorough research.

 

[GarfieldtheCat]

Obama

Hmm....nick1985 is:

a. Trolling
b. Clueless
c. Both A and B

Vote now folks!

We report, you decide.