Top Three Myths about the Great Depression and the New Deal

[@murkythreat]

I was reading through my history book and noticed how the "new deal" did absolutely little to help the economy, when I said this to my teacher he and the class laughed, but he asked for my response, that's what I got out of the book.

[@dudefromtheearth]

Great video! I am loving Learn Liberty! There is hope for us!

[@caller347]

I do disagree with some of this man's points, but then again he is british so he is probably right.

[@markyuto6820]

Another expert again?

[@nickspraker]

@AroundSun Yes, the soldiers weren't spending it and the families back home were spending less but all but about 3% had a job and had income so when the war was over and the soldiers came home they had money to spend and this caused a real boom to the economy

[@davidbarr707]

Actually WWII did play a huge part in ending the Great Depression in the United States. But not in the way of war build up. The commentator is correct in that. It ended here because every other Industrialized nation had large numbers of their factories destroyed through bombing campaigns. The United States infrastructure remained unscathed.

[@HomelessOnline]

Imagine my surprise! I went to public school and he has just contradicted everything I was taught about the great depression.

[@sebastienholmes548]

Public education: why teach when you can indoctrinate.

[@kalien9990]

wealth is not just measured in government revenue but also the income of the population. WW2 lead to the employment of millions in the USA and industrial expansion.

[@LiouTao]

Sure, unemployment went down, but so did the quality of living as well as exploding US debt. US economy did not start booming until post WWII, when the US government drastically cut spending.

[@LiouTao]

Money is useless if you don't have produces to buy. Lack of real wealth production, which are products usable by the consumers would just mean inflated prices of existing products. Low employment rate does not necessarily mean a healthy economy.

[@Gunns57]

***** Did that number include women?

[@ivancampbell8123]

LiouTao How could said that b cutting spending stimulate economic grow tat is a BIG LIE

[@adulby]

Great Video, Great Information, but i have to ask....why are you in a movie theater?

[@caderlocke8869]

Where are your citations?

[@JamesR1986]

Somehow I doubt you would be asking for citations if this was Paul Krugman preaching that the great mistake of the depression was that we didn't spend enough. Look, the increase in debt during the Hoover administration, the unemployment rate throughout the depression, the economic situation in the UK(and the rest of the world for that matter) vs. the United States, these things are not state secrets. They're pretty easy to find on this thing called the internet. Use it.

[@gumgumdookuin7963]

It’s not a conspiracy theory! Hoover wanted to help. FDR just took those same ideas and said, “I did this, not mister do nothing over here.” Franklin played as a politican, a good one that like to lie

[@TheFlame234]

Could you explain everything you said in those paragraphs? Also was FDR one of the reasons for The Great Depression and made it longer? (I'm ignorant but I want to learn and sorry for the late response)

[@jsmith3011992]

Okay I'm sorry I just can't ignore that, "Britain's economic depression was over by 1933 and enjoyed rapid economic growth from 1931 onward". Orwells road to Wigan Pier was written in 1936, this book documented his investigations of the bleak living conditions amongst the working class in the north of England during the depression. Also the The Jarrow March which was a protest march against unemployment and extreme poverty suffered in North East England during the Great Depression was in 1936. So please don't try and tell me the depression was over in Britain by 1931, it is a lie sir, not only that it is a vile beastly lie, deliberately ignoring the facts and sufferings of millions in order to fit a skewered economic theory based solely on cherry picking and ignorance...

[@SaulOhio]

Have a look at the data. Yes, unemployment was still bad in 1936 in England. But it was falling quickly and steadily, unlike in America, where it went even higher and came down slower, and even jumped up again around 1936: www.economicshelp.org/blog/wp-content/uploads/2012/10/1918-38-unemployment-rate.png

[@jsmith3011992]

SaulOhio Just looking at that graph still proves that this man is a liar, he said, "Britain's economic depression was over by 1933 and enjoyed rapid economic growth from 1931 onward". Even this rather sketchy looking graph proves him wrong as unemployment remains high all the way to 1937. Also Britain, while it didn't have a new Deal did have very interventionist policies and a very dubious way of counting the unemployed (The millions of homeless tramps were not counted as unemployed). By the mid thirties Germany was rearming at an alarming rate and so do did Britain and France. This government spending helped push the countries out of depression. Also of course the depression was worse in America, thats where it started, obviously its going to be worse there. Finally as proof the New deal was working as you said unemployment was coming down till 1936 it spiked again, well why was that? It was because the government ended subsidies to farms and the WPA during this time and so unemployment immediately jumped up again...

[@SaulOhio]

War spending does NOT cause real economic growth. Real growth means an increase in the economy's ability to serve the needs of consumers. If millions of workers are building bombs, tanks and guns, they aren't making automobiles, growing food, building homes, or any good things that people actually want. Lee Ohanian would disagree with you on that recovery till 1936. FDR and the Lessons of the Depression online.wsj.com/news/articles/SB10001424052748703461504575443402028756986 "The economy did not tank in 1937 because government spending declined. Increases in tax rates, particularly capital income tax rates, and the expansion of unions, were most likely responsible. Unfortunately, these same factors pose a similar threat today. Here are the facts: Real government spending, measured in 1937 dollars, declined by less than 0.7% of GDP between 1936 and 1937, and then rebounded in 1938. It is implausible that such a small and temporary decline reduced real GDP by nearly 3.5% in 1938 or reduced industrial production by about one-third. Enlarge Image Associated Press But in 1936, the Roosevelt administration pushed through a tax on corporate profits that were not distributed to shareholders. The sliding scale tax began at 7% if a company retained 1% of its net income, and went to 27% if a company retained 70% of net income. This tax significantly raised the cost of investment, as most investment is financed with a corporation's own retained earnings. The tax rate on dividends also rose to 15.98% in 1932 from 10.14% in 1929, and then doubled again by 1936. Research conducted last year by Ellen McGratten of the Federal Reserve Bank of Minneapolis suggests that these increases in capital income taxation can account for much of the 26% decline in business fixed investment that occurred in 1937-1938."

[@jsmith3011992]

SaulOhio Im afraid thats simply not true, war spending has been used, and still is used as a major spur to economic growth in the US for the last 70 years; thats why military spending in the US is still so high despite the cold war being over for 20 years… I think you'll find that the problem during the great depression, as it is now during the great Recession, is not that taxes were/are too high or that (I can't actually believe you said this but) that Unions are too powerful (Union's by the way are one of the few democratic and wage protecting institutions in the economy) but that the demand for goods collapsed. I.e the US was producing far more than it had need for and so millions were left unemployed. Now the war effort put these people to work, just because a factory isnt producing cars doesn't mean its not paying its thousands of workers a wage. A wage they then spent on consumer products like cars, food, houses etc Also people seem to not understand that an Army needs more than tanks and guns to survive. The army needed everything from shoes, containers, buttons, tons of food, machine parts, ships, cars, cigarets, paper, basically everything and so the economy boomed selling it to them. Also think of all the soldiers employed by the war effort spending their wages on consumer products… We can argue back and forth over what caused the relapse in unemployment in 1936-37, as economists have done for years but the fact remains what got the US and the rest of the world out of the great Depression was not a lowering of taxes, or union busting or whatever. It was a huge public works program i.e WW2 Capitalism was disproved on the fields of Flanders when it became obvious that a economy run with at least some state guidance would create a far more powerful country than any capitalist one pushing and pulling in all directions. The British and Americans learnt this early in the war and immediately began creating a state run war economy; after the war they realised it would be stupid to go back to the stagnation and poverty of the 30s so they didn't. And so the golden age of the western economies began, wages rose for everyone during the 50-60 unlike now were they been stagnating since the 70s after all the union busting and deregulation. Taxes were very high during the 50s-60s yet the economies of the west boomed, and yes I know most US competitors were destroyed by the war but so was their ability to buy US goods but the economy still boomed. Military spending has been used as a control factor in the economy for a very long time, it acts as a way for the govt to spend billions in the economy without anyone questioning it or calling it "corporate welfare". Think of all he amazing technological innovations that have come out of the public sector, not the private in the last century, that have revolutionised the world and made trillions of dollars for the world economy. Think computers, lasers, the internet and all the trillions its generated, rockets and space flight and the technology that has come from that, satellites, jet panes, heavy machinery, robotics, high tech medical equipment, mobile phones, fibre optics, the list goes on and on… All these were developed with public money under the military system and not by some fedora wearing private entrepreneur with but a buck to his name and an idea, as the myth goes. It can be difficult to accept the huge role the state plays in the economy but the fact is that its there, and its from there that almost all the major technological wonders of our age have come from. Its whats called an unpleasant fact...

[@SaulOhio]

Odysseus Ulysses Yes, governments have USED the excuse that war spending is good for the economy, but that doesn't mean its true. Medieval kings used the excuse of the divine right of kings. Does that mean its true? The government spending didn't cause the engineers and scientists that created those new inventions to simply pop into existence. If they had been left in the private sector, their intelligence and creativity could have gone DIRECTLY to producing goods and services that people actually need, instead of first diverting that creativity and intelligence to finding bigger and better ways to kill people. We would be better off. Certainly Thomas Edison didn't need that government war spending to motivate or enable him and the people working with him at Menlo Park to invent a huge array of new products. Bill Gates and Steve Jobs weren't producing goods for the military. The military spending SLOWS DOWN the process by first using that creative energy to produce new ways of killing, THEN it gets applied to consumer goods. Better to do it more directly, bypassing the killing inventions.

[@jlhill17]

Economic growth is created primarily by businesses, especially small businesses, not by taxpayers. If businesses thrive, more people get jobs. The New Deal did create jobs, but was not helpful for creating more jobs in the long run. WWII did make our industry boom, but a large portion of what was produced went to war and was destroyed. Destroyed products don't provide wealth.

[@fanadfilms]

What ended the Great Depression, almost as in the Depression of 1920, was FDR died and Wilson had a stroke. The Congress, sans FDR's influence, stopped the profligate spending. Truman submitted FDR's budget, and the Congress voted NO. in 1920, Harding reduced spending and taxes. Coolidge went even further. It was Hoover's interventionism that caused the Crash of 29 and FDR's exponentially larger interventionism that created the Great Depression.

[@dmcarefuldriver]

I'm not a libertarian, but this is historically accurate. The New Deal helped to pave the way for the flourishing 50s and 60s, but did not cure the depression in the 30s. World War II put a lot of people back to work, but real economic growth didn't occur until the baby boom after the war.

[@SaulOhio]

I disagree that the New Deal helped pave the way for the 50's and 60's. By then, most of the New Deal had been repealed or abandoned. There is nothing about it that promotes economic growth.

[@TheAlibabatree]

"One must learn by doing the thing, for though you think you know it, you have no certainty until you try." -Aristotle. The basic idea is that you cannot understand something until you have experienced it for yourself.

[@rB777ftw]

That's not true. The economy began expanding as soon as the New Deal was implemented. The economy went into recession again in 1937 because FDR cut back on some of those programs.

[@TheNavalAviator]

But if it's other countries' wealth that is destroyed you are at least better off as the only one with an intact industry.

[@JustinColletti]

+John Wayne No, having other people around you be poorer does not make you wealthier. You are in the same place on an absolute, or probably worse, as you will have fewer prosperous people around you to trade with. That is the "zero sum" fallacy talking.

[@kingmatt2563DABEST]

Well not as bad lol.

[@TheNavalAviator]

Justin Colletti It was sarcastic but many believe it.

[@tabletalk33]

Excellent summary.

[@geckoslick]

Does anyone know where these arguments have been detailed in print? I'm interested in finding out more

[@AlecTaylor6]

Great quick video! - Nice, concise explanation!

[@countchoc90]

It ended when all the soldiers returned home and joined the workforce, government spending fell drastically, and regulations were rolled back to allow proper business growth. When you look at charts and data, GDP, unemployment, wages, etc didn't pick up and expand again until a few years after WW2

[@EngineeringFun]

Makes sense and this guy puts it so concisely. We are living through the same interventionist setup now but people still won't wake up to the truth. It's just like religion. The brain of most people indulges in the idea that there someone "up there" who loves and cares for them. They go through all the crap and extend their suffering because they like this virtual drug.

[@bonanzatime]

Do you think you could elaborate?

[@JakvsMetalheads999]

Probably these and some movie trailers are the only ads I don't just hit skip on -_-

[@EconCat88]

One of the things that perpetuated the Great Depression was wages were held too high for too long.

[@lolnickfox]

Are there any peer-reviewed references for any of these claims?

[@foreverdream1]

If the war did not end the Great Depression, what did?

[@allgoo19]

@AroundSun No reply? Let me clear and understand your point. Correct me if I'm wrong. "Under the free market, when the economy is slow, companies increase the production to boost the economy."(Voluntarily and even taking risk of loss.) True or false? If it's true, doesn't it sound a little stupid?

[@postoergopostum]

Wealthy people are not wealthy because of good luck and hard work, as they like to claim. They are wealthy, because they are greedy.

[@oldoldoldoldold]

@RyanR3volution You bring up a lot of interesting points. 1. Is theft the destruction of wealth by non-voluntary means? I thought it was someone taking something else for themselves in an illegitimate manner - the legitimacy of which is determined by the government 2. Please explain why fiat currencies are a lie and are counterfeit, and why they can't keep going. 3. And what does centralized planning have to do with all this? Besides, centralized planning industrialized many countries

[@ManintheArmor]

War has a funny habit of spreading out wealth as well, assuming the enemy steals technology from the otherside and acquires knowledge from reverse-engineering. One of the reasons why the military is unmanning many vehicles and such is to decrease the casualty rate of live personnel in cases of thievery.

[@a4finger]

Awesome video!

[@FletchforFreedom]

@offsprng46 The natural clearing level is, by definition, the market price (which does not liquidate tangible assets but simply recognizes the actual valuations that exist as determined by supply and demand). Hoover and Roosevelt both intervened in particular to prop up wages (which is why unemployment skyrocketed) and, in an effort to prop up prices FDR slaughtered millions of pigs and plowed under crops which actually did destroy tangible assets.

[@blazerider6]

He tried to convince business leaders to cooperate for recovery, and failed. He spent hardly any money to attempt to put people to work, believing in the superimportance of a balanced budget and the capacity of the private sector to fix itself. The money he did allocate with the RFC was largely unspent because of strict implementation procedures (only for toll roads, public housing, and large banking corporations). His refusal to do any significant interference allowed the Depression to worsen.

[@Bluehero345]

Also: In theory, you are correct in regards to the relationship of GDP to unemployment, but in practice there are other factors which can prevent unemployment from decreasing. A perfect example of this is the current recession, where our GDP is still growing (it technically never STOPPED growing, growth just slowed down), yet unemployment is remaining relatively level w/ minor reductions.

[@Bluehero345]

I recognize the point, but from an economics perspective, there is no direct correlation between the two. If you were given a problem in a basic MacroEcon class that asked if GDP growth would likely lead to a decrease in unemployment, you could say yes, but in reality unemployment correlates more directly with inflation than with anything concerning GDP, growth or otherwise.

[@jackcarraway4707]

What never gets brought up is that Warren Harding faced a worse stock market crash than the one in October of 1929. He did very little and the economy recovered in a timely manner.

[@WalterBurn]

@Veshgard Sorry about taking so long to respond. Been busy. Anyways, in the case of America, a lot of the weapons being built were used in WWII, which makes no profit. People were drafted and thus taken from other sectors of production to fight a war. That, and production was diverted to making weapons as well. Perhaps it made some people richer, but it makes everything cost more due to the decrease in production from other sectors. There's a reason we had a lot of rationing during this period.

[@epetro10]

I wish he had gotten more specific or referenced actually data or research. Even some links in the description would have helped. I can't just take his word for it....

[@DriverRob73]

You are right in that new factories were built and industrial production was increased across the board for the war. However, all the products of those times were expended in war and did not make the lives of the citizens better during the war. Indeed, not only could you not get a new car, or toaster, or whatever, but almost every family lost a loved one. Some half million Americans died or were maimed for life. So the war economy operated mainly to benefit the owners of industry who profited.

[@cristianodj]

Where I can find more information about this?

[@drewmasterflex14]

@geckoslick There is an article called "Wartime Prosperity? A Reassessment of the U.S. Economy in the 1940s" by Robert Higgs, and that would be a good place to start since it is relatively short (19 pgs) and easily available if you look on google scholar. Higgs also has some good podcasts on a weekly show called EconTalk with the host Russ Roberts. On EconTalk there are also other podcasts that deal with the Great Depression and economic history and data controversies.

[@mattlm64]

Increasing production while all other variables remain the same doesn't increase wages. Instead it reduces prices of the producer because of greater supply.

[@chriswpieper]

#1: Hoover may have had interventionist policies, yet his lack of action is what kept the depression going. When it came to the depression he believed that the economy would heal itself. #2: The new deal didn't directly end the depression, yet it helped the economy immensely and the depression would have lasted much longer without it. #3: Wars may not create "real wealth," but WW2 did create tons of jobs and manufacturing which led to economic growth and more jobs in the US.

[@danieldefenseM4]

@danieldefenseM4 The bottom line is, WWII did three basic things to the economy: 1. It took millions of unemployed/underemployed men off the streets, and put them in the military. 2. It gave new jobs to those that didn't go into the military. 3. The money people earned from their jobs during the war then added to American wealth, giving new jobs too returning vets.

[@anonatall]

@jjrglobal :Thanks for your observation. Does it follow that our internal wars contribute to the economy in the replacement of windows, production of caskets, employees of insurance companies, all medical spin-offs, and so on? Corporate anarchy? I'm trying to understand this. Thanks again.

[@danieldefenseM4]

@crazypants88 You are missing the point. The "digging ditches" analogy does not work in this instance. Unlike digging ditches, which does not produce anything or offer any rooms to grow, companies and industries producing goods for the government during WWII grew substantially that would carry into well after the war from the boost they got during the war.

[@allgoo19]

@AroundSun "That isn't real employment.." It doesn't matter where the customers getting their paycheck from. A dollar spending is a dollar spending to the local economy, the stores and restaurants still appreciate your business.

[@Wesley-ri7ok]

Hoover was a laissez-faire president. He didn't step in during the great depression and allowed a number of banks and other American companies to fail putting a number of Americans out of work. The new deal and its programs slowed the growth of the great depression by putting more Americans into work at the cost of the government, this was to get things moving again. When we entered WWII our economy became centralized which boosted our military and economic production. It was what war let us do.

[@Bluehero345]

okay...all I said about farmers was that there were a good number of people whose only job was growing food for themselves(subsistence farming), and that because such people don't participate in the greater economy the way other workers do, it is more appropriate to use an unemployment number which removes them completely. In 1934, that statistic was 33%.

[@JohnAnonymous]

@Veshgard But the question is: Is there an overall net gain? And the answer is: There isn't. If war would result in a net gain, than the US could make a deal with e.g. Japan, to send lots of warships to the north pacific and blow eachother to smithereens (remote controlled of course, because we don't like casualties). Now, would that do any good?

[@magister343]

@magister343 It should of course be noted that the global effect of the war was still wealth destruction. The damage done to Europe outstripped the benefit that the US gained before officially entering the conflict. It's like the laws of thermodynamics. You can combat entropy locally, but only by accelerating it elsewhere. A refrigerator must dissipate more heat to its outside environment than it can remove from its interior.

[@bucsfan14ce]

@TumisHumis Of course I do. But, please, make your point. I'm curious to see the path you'll chose.

[@TheYamsinacan]

It seems that LearnLiberty's argument is that Britain did not use public works projects like the US. BUT they did, and North and Wales were experiencing unemployment issues as late as 1935 and 1936.

[@cesarramirez5370]

great information.

[@obits3]

@GeekForce5 I agree with the basic idea that we need a stong military, but there is still a debate to be had over what that means

[@Blankskeen]

Lol, this video reminded me about how bad my history teacher was and how, during the unit about WWII, was trying to tell the whole class these three myths, or "facts" as she would refer to them as

[@branhoff]

@branhoff I will be happy to debate this with you between emails if you'd like. With a limited number of characters per post it is very frustrating to get my point across.

[@jesse98362]

@Buddy212002 I think you might be taking my comment out of context, but that is ok, because I mostly agree with you. What books would you suggest? I would love to have a look. For some treatment on Brown Brothers Harriman, you should check out the first few chapters of "George Herbert Walker Bush the Unauthorized Biography" by Webster Tarpley, as they deal with Prescott Bush, the Father of George 41. Or watch the film JFK II which is a very well done Internet documentary.

[@magister343]

War do not only destroy wealth, but also transfer it. While old fashioned pillaging is not as common in the modern era, long wars do cause shifts in the belligerents' economies that make them turn to trade for many of their essentials. I tend to think that WWII did play a major role in getting the US out of the Depression; fighting the war did not help, but becoming "the arsenal of democracy" and receiving a large influx of funds from Europe to pay for our newly needed output did.

[@FletchforFreedom]

The problem with your theory is economic booms do not (in fact, cannot) result from more consumers. It can ONLY result from increased PRODUCTION. And by eliminating the drag resulting from massive governmental intervention in the economy, this was made possible.

[@Causarius]

@F859 "last ditch effort in the last year of his presidency" Yet...the Hoover Dam began construction in 1931 and Hoover didn't leave office until 1933. Rexford Tugwell, who was one of the men responsible for the New Deal said in 1946 “The ideas embodied in the New Deal Legislation were a compilation of those which had come to maturity under Herbert Hoover’s aegis. We all of us owed much to Hoover”

[@randy95023]

Everyone should read Henry Hazlitt's "Economics in One Lesson". His chapter on War carries on where the "broken window" fallacy ends. It's not really that hard to understand. Hazlitt's book was serialized in the late 1940's by Reader's Digest. I wish they'd run it again...

[@00Klingon]

My theory is that the fact that America was one of the few industrial countries to survive WWII with her factories intact and increased demand due to rebuilding europe may have had a lot to do with the recovery from the great depression. The 50's were an era of manufacturing dominance for the US.

[@koblinsc]

@whoo689 These downturns (late 19th century) are 1) less severe (and more infrequent) than many misinformed portray them to be and 2) occurred in a period when banking was anything but free. The 'wildcat' banking era came to an end with the civil war, push toward national charters: taxation and regulation on state chartered banks, and stipulations that banks must finance the government to obtain national charters. Personal checks were developed as a workaround for taxes on private bank notes.

[@danieldefenseM4]

@WalterLiddy Once again, I will try to make it clear. The war's need for goods and services required many more jobs than already existed. The government created contracts with industries and companies to produce goods for the war. This employed hundreds of thousands of unemployed people, giving them income they didn't have. This boosted or created new PRIVATE industries they worked for, which carried into after the war. These industries also had room for jobs for returning vets.

[@UmTheMuse]

Thanks for the reply. I should have been more emphatic that I was talking about increased *potential* production, though. I guess what I was saying is that the war demand did create increased supply temporarily. When the war ended, I imagine that there was a lot of excess capital, an increase in technology, and possibly more workers (sure, many died, but the labor force could have jumped higher by allowing women in the workforce). Not to mention pent-up demand.

[@jimmyhatt4]

@FrancesKay1 Actually my business professor told us that when you raise taxes rich people hire so they don't have to pay the tax. Instead of buying that 39th Ferrari they actually hire people because they would rather pay a person to work and innovate than give to the government. Its a better investment. When you raise taxes it makes that 35 million dollar piece of art on the wall cost 55 million.

[@Bluehero345]

In 1934, the US still had an unemployment rate of around 33%, and the Second New Deal didn't occur until 1937, so there were clearly still problems after 34...

[@hotant522]

Booms and bust cycles occurs when a central bank inflates the money supply and artificially lowers interest rates. this gives the false impression that there are more savings in the economy then there actually is... The US had to inflate in order to pay for WW1 (inflating is always more politically viable than raising taxes) and in 1920 we had a bust, Harding did very little and that depression ended quickly. During the 1920 the Fed continued to inflate, until the bust in 1929.

[@blazerider6]

Thirdly, unemployment and all other major economic factors improved after the New Deal went into effect, dropping almost 7%. Finally, the 1937 recession was a result of too much union pressure on burdened businesses, which ended when union issues were abandoned because the war had started.

[@IoEstasCedonta]

I'm not convinced regarding the war. War doesn't create wealth, but can't it redistribute it? In this case, from Eurasia and the Pacific Islands, where most of the fighting was, to the US, which suffered almost no damage to infrastructure and got plenty of lucrative deals from the resolution?

[@Wolfeson28]

Common sense tells us that war stimulates the economy for two reasons. First, while war leads to the destruction of materiel, that means more has to be produced to replace it. That means more jobs are required for people to build all of that, and produce the necessary raw materials. Second, during a total war, rationing reduces supply, which leads to massive pent-up demand. That demand is then released when the war ends and more civilian products become available again, sustaining the growth.

[@tifforo1]

@CLeach13 The debt resulting from the New Deal actually wasn't that large. The deficits in the 30s were tiny compared to, say, the deficits in the 80s.

[@TOASTEngineer]

Mmh. I do wish they cited some sources every now and then.

[@FletchforFreedom]

I am familiar with Goldston's work (and why it is not taken seriously). Even MacFarlane didn't make that error. you're much better off reading Friedman & Schwartz, or Robbins, or Rothbard. Talk about cutting spending happened but no such cuts actually took place. There was a small programmatic drop in spending as the economy improved but that's all. Tax hikes, albeit lower than had already been instituted, did take place. Still, the timing fits perfectly with passage of the Wagner Act.

[@oolong2]

@Causarius I'm not going to repeat the many examples I sited following the aftermath of WW2. So if you want to choose to ignore all the innovations that came from that war and how the US grew to a world power following that war then there's nothing anyone can do about that.

[@uzijohn]

@Buddy212002, Supplying war materials and shipping them into a war zone is hostile activity, ships had American flags but were the property of businessmen making money on war, although denied the Lusitania WAS carrying war supplies. In 1916 WW-I was at a stalemate with Germany having the advantage, had America stayed out, Germany could have negotiated a "reasonable settlement" and there wouldn't have been a Nazi Party or a Hitler. Remember Stalin also broke promises, and was a "mad man" too.

[@VirtusArete]

okay... did i miss it, where are the sources for this information, or is it just based on speculation?

[@jesse98362]

@AroundSun The fundamental thing that you don't understand about economics is that a dollar injected IN is not just one dollar. It gets spent and re-spent. Without some conception of this, you cannot understand a thing about economics.

[@torpedodropkick59]

Not Govt debt, private debt that drove the stockmarket to crazy heights and borrowing on margin to speculate on rising stocks, Govt debt to finance war effort created jobs that private sector could not do, govt spending kick started it and by the 50's its was in surplus.

[@MrLewisMovies]

Can you show me this statistic your talking about?

[@SatchmoSings]

@GarrettPetersen There was no unemployment during WW2; domestic consumption also shot way up; the US was the only country that had an INCREASE in the standard of living during The War.

[@Bluehero345]

...what? First off, that class of people are usually not looking for a job, and thus aren't included in the labor force. Second, I was saying that an unemployment rate of 8% is troubling when we consider the modern historical average has been 4-5%.

[@OgreMECH]

Didn't military spending eventually lead to our highway system, the computer, the Internet, and our space program? Wars (and competition between nations) seem to end stagnation and spur innovation.

[@Watemon]

So I can say that "war, in fact, destroys wealth" and then not be required to, not only provide absolutely no evidence to support this assertion, but also not elaborate as to what efforts ACTUALLY "saved" us from the Depression, since, apparently, WW2 couldn't have possibly actually been responsible for fixing anything-or even getting us on the road to recovery-because wars "in fact, destroy wealth".

[@klemens33331]

I found a solution to the problem: "Commonwealth!" Here's an example of how: a talented entrepreneurs enjoys the challenge to create a successful business. He then sells it to his employees, who then become owners; i.e. don't depend anymore on unions and low wages. The entrepreneur gets his money back with some extra and starts a new venture... and again selling it to his employees etc. and every time the entrepreneur gets his money back with some extra and starts an even bigger venture... Gradually, we all become self-employed business owners! If then the more greedy ones own more, the less greedy ones won't envy them. Imagine how proud an entrepreneur then could be after having turned 2000 low wage earners into well to do business owners! So, why it is not happening? Because most (if not all) talented entrepreneurs suffer from sordid greed! They believe only their talents deserve all the materialistic riches in our world. :( Reason: They failed to dismantle their inherited/ or environmentally acquired negative traits and thus are unable to develop their full human potential! Are they not worried that their grossly selfish behavior in the long run might ignite yet another massive "Kristallnacht" type revolt?

[@RedDragon412]

One thing that was also a factor in the US's recovery was the acceptance of women in the workforce. Because of the draft and all the "we can do it" propaganda, women working in non-traditionally female jobs became much more common and accepted, which helped to boost productivity, especially when the remaining men returned from the war and took jobs in the private sector again.

[@yuothineyesasian]

If you haven't read anything about Milton Freidman's critique of Fed policy during the Great Depression it's a great place to start.

[@xdassinx]

@Anastrodamus He left a great deal out. His kind always does. During WWII there was massive shortages and rationing back home. However, major corporations did make a huge amount of capital that they were able to invest after. The personal economies of the returning troops improved due largely to the GI Bill giving them the opportunity to get better jobs and so on. So he is right that the economy didn't totally recover during the war. The massive spending during the war did enable recovery after

[@ametora1231]

The end of the war & the New Deal policies lead to economic prosperity following WWII. Rations, price controls were lifted. Govt spending reduced. Tax burden reduced. These are what led to economic prosperity, not the war itself.

[@mussman717word]

"By definition, military production output is not real wealth." He gave no solid explanation for this. He mentioned "figures," but he doesn't mention any of them. Somebody, please, I demand an explanation for this.

[@magnusea]

@ParadiddleMcFlam War isn't about how the "raw materials" is moved and to which extent they are used in an _internal_ business calculation. Even if war costs huge amounts of money it can be well worth both money and suffered life. You should ask those who fought the WWII.

[@jbeach2323]

@RyanR3volution - I'll break it down for you. 1) of course private industry can make SOME dams, roads, etc. 2) but private industry will only do things they can make a profit on - and the quicker and surer, the better. 3) so if a project won't pay off for 50 years, OR might not at all, OR might not benefit the specific company, the company might not do it at all. Do you disagree with any of the above points? Let me know before we continue.

[@FletchforFreedom]

@pjmgame Actually, the fact is that there were demonstrably no actions undertaken by FDR that could have ended the Depression. He created a wage floor (spiking unemployment), meddled with the money supply, intervened so often he caused "regime uncertainty" (like now), destroyed pigs and crops while people went hungry and massively remived reosurces from the orivate sector. A worse recession 9 years early was over in 18 months. How does FDR's record compare?

[@macsnafu]

I agree with his points, but it would still be better if he presented some links or cites to back up his statements. No one's likely to believe him simply because he says it's true. However, if some really wants to find the truth instead of engaging in confirmation bias, he said things that can be checked. Hoover, for example, *did* do much to intervene and deal with the Depression. Look up what his administration did. FDR simply did more of the same things that Hoover did once he was in office.

[@toaojackson7447]

i couldnt have said it better well done

[@jlhill17]

That is a perfect example of how not taxpayers, but businesses, especially small businesses, create true economic growth.

[@jbeach2323]

@RyanR3volution - I don't know what you're talking about. But it was Paul Krugman who predicted the housing bubble - and wasn't listened to by the right-wing GWB administration. Any other notions you'd like me to disprove?

[@allgoo19]

@AroundSun "PRODUCING is what we want." Who's going to increase the production while consumers don't have the money to buy? Do you know any company makes products when they know it'll sit in the warehouse forever?