Originally posted by: LegendKiller
Originally posted by: dphantom
Originally posted by: LegendKiller
Originally posted by: dphantom
Originally posted by: LegendKiller
Originally posted by: Farang
Originally posted by: TheSnowman
What is he talking about in regards to Japan in the '90s? I'm not familiar with any such economic stimulus programs there.
Also, with his dismissal of the New Deal, I'm at a loss as to what he credits for the economic recovery and rise of the middle class though the following decades.
Can anyone make any sense his arguments here?
New Deal was ineffective, turnaround can be attributed to the war. That is what some claim.
And they would be wrong in their claims. Unemployment was declining quickly pre-war.
Unemployemnt was declining quickly pre-war because spending was rising sharply in preparation for war as the US military began expanding and sales of war materials to Great Britain began increasing. Roosevelts New Deal was only marginally effective in offsetting the GD.
Roosevelt did not want to follow a path of heavy deficit spending like Sweden, Germany and others did. In fact, both these countries came out of the GD ahead of the US. Sweden because of deficit spending and Germany too with deficit spending as it rearmed and expanded its military.
The social programs had little to nothing to do with any economic recovery. It was expansion of the industrial base and investment in those areas where goods were made that brought us out of the GD and that started when spending for the war began in 1939-1941.
Please, unemployment was declining rapidly way before the Lend/Lease act, or any type of re-armamanet was beginning in the US.
Sigh
Unemployment rates
1932 23.6%
1933 24.9%
1934 21.7% Sweden emerges from GD
1935 20.1%
1936 16.9% Germany emerges from GD
1937 14.3% recession starts summer of 1937
1938 19.0% recession continues, Britain emerges from GD
1939 17.2% US and other countries emerge from GD as spending for war preparations takes over
So, no, unemployment was not falling rapidly. War preparations and the industrial expansion required for that was the leading indicator of most countries coming out of the GD.
Unemployment had declined more than 25% from the peak before wartime spending had increased dramatically.
Yes, Sweden spent a ton of money to get out of the GD sooner, but they also had a far lighter GD than most of the world to begin with. Germany and GB exiting did have everything to do with the war spending.
Other countries entered or exited sooner or later than the US due to a myriad of reasons. No single broad-based attribute can explain the country's situations (except the war).
The New Deal was more than marginally effective but could have been much more effective. Was it the correct decision? Depending on what you were willing to pay for. Taking Sweden's route wasn't appetizing, so we took the ND.
You get what you pay for.
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