So you are saying the average American joe who would normally be paid to fix widgets or manufacture widgets or grow widgets, was instead being paid to shoot Germans. The money used to pay them was taken from people who would normally spend that money on investing in the manufacturing of widgets or widget farms or widget schools. And this was really good for the economy. In fact, much, much, much better than if the government had simply spent that money on creating more widget schools or helping widget entrepreneurs create new businesses or infrastructure to help transport widgets or helped pay for better health care. It just seems to me that money spent on things other than shooting Germans gets recycled into the economy over and over and over. You build the school, it educates people, those educated people build new companies, those companies hire people, etc. If you use the money to shoot Germans, well, you wind up with a lot of dead Germans. I just don't get that. You are going to have to explain this in more detail. Try three sentences.
1. Govt. needs money to fund the war. 2. Govt. issues bonds to get those funds. 3. Who buys the bonds? They're bought with the soldiers' salaries. 4. Remember, most of these guys were eating at the soup kitchens, not earning a paycheck and paying a mortgage. 5. Additionally, govt. needed Ford to make tanks and jeeps and planes, so issuing bonds took cash from potential car buyers. 6. When the War was over, the boys cash in their bonds to use as 5% down for VA loan to buy a house. 6 sentences.
Really? What gives with all the ads from that era asking joe public to buy bonds. The debt was owed to over 85 million Americans, a lot more than just people who fought in the war (16 million). It was a good public works project in terms of employing people. (But let's not overstate it--unemployment rates topped out around 25% during the Great Depression. Most of these guys were actually earning paychecks before they were drafted.) Woohoo! Government takeover of major american car manufacturers! It worked then, and it seems to be working now! The soldiers got sweet government loans for housing and education, paid for by borrowing from the general public. Kind of like how we now borrow money to pay for all sorts of public education and housing programs that you hate. There are actually two major differences between government spending now to get us out of recession and government spending then to get us out of depression: 1. In WWII a shit-ton of that spending went to killing Germans (and Americans). After the war, a lot also went to nice federal education and housing programs. Now a shit-ton of that money goes to keeping old people alive and happy. A lot also goes to the military. Some of it (not nearly enough, in my book) goes to education, infrastructure and health care for everyone else. 2. In WWII nearly all that money came from the US. We borrowed it from soldiers, yes, but also bankers and grandparents and industrialists and everybody. We also taxed the wealthy through the nose. Now the majority of our borrowing comes from overseas. Government spending to get us out of tight financial spots clearly works. When nobody wants to write a check, Uncle Sam will, and it'll cash every time. It was true in WWII, and it's true now. The big problem as I see it is that during our fatter years we didn't raise taxes and reduce spending, so that we'd be ok to borrow/spend more in the past few years of shitty economy. Instead, Bush and Congress dug us into a deep hole of borrowing from foreigners, and we're borrowing even more to try to pull the economy out.
except the 500k peeps who couldnt buy houses with their cashed in war bonds because they were, you know, dead.
The soldiers sent home their paychecks and it was good for the govt. to take that money out of circulation so consumers wouldn't create demand for automobiles and other things that the govt. needed to make war materiel. There was no govt. takeover of industry, it just created massive demand for products those industries could make but normally didn't. 16M soldiers means 16M jobs created. Someone (Rosie the Riveter or other previously unemployed) had to take the place of anyone who had a job and went into the armed forces. "Some of it goes to the military" - not enough by FDR's standard, since he spent the equivalent of 2x what we take in from all forms of taxation on military alone. When he spent deficits that were 25% of the entire budget (for years), all those peace-time/peaceful type social programs didn't do SQUAT to make a thing better. If you think the high tax rates funded the War, think again. We'd have had no deficits (but they were HUGE!) if your belief were true. Doesn't even pass the sniff test. And all forms of income tax revenue only made up 1/8th of receipts (a good argument to cut govt. by 1/8th now and eliminate everyone's income tax). The govt. is really only good at one thing, and that's writing checks. I've posted on numerous occasions that the best govt. programs in history were the VHA and GI Bill (education vouchers, which you oppose).
I oppose education vouchers? I didn't know that. I thought I liked it when the government helps out on paying for education. Huh. I didn't say high tax rates exclusively funded the war. Why do you think I did? None of the peace time programs did squat? I've got a few damns that might disagree with you. Actually, it took a few years for the programs to start to have an impact, here's unemployment in that era: Notice that big plummet and then spike in 1937? Here's why: http://www.huppi.com/kangaroo/Timeline.htm The depression was trending down, it had a hiccup when we prematurely gave up on federal spending programs to fight it, then it continued down when a new federal spending program (WWII and the post-war programs) came along.
lol. Yeah, that's why it's called a "line chart" and not "two data points stuck on a piece of paper." Because trends before and after the points kind of matter.
lol, yeah, when you start at the one data point, then spend $26B (equal to 33% of all spending) in deficits until the second point, you can be sure that the $26B had no effect. Otherwise as spending increased, unemployment would decrease, no?
You've got cause and effect mixed up there. Unemployment was falling as early as 1935. As the falling rate gathered momentum, FDR came under a lot of political pressure to cut programs by deficit hawks. In '37 and '38, the hawks got their way, causing the second spike. As the government again started writing checks to ramp up for WWII, unemployment started falling again. Again, you cherry pick two data points. I'm talking trends.
The trend was continuously upward as FDR increased spending (from the first point marked). Just like Obama said unemployment wouldn't exceed 8% if we spent his $800B stimulus money. If at first you don't succeed, keep on sucking 'till you do succeed?
Denny, were you giggling hysterically when you wrote this? Because I certainly am reading it. mook has already deconstructed this, so I won't bother, but the point bears repeating: everything you claim was effective in the 40s is just the sort of thing you are adamantly opposed to in the present. barfo
You have a fine wit, but I'm not seeing WW III and 45% of GDP spent on our military. Want to try again?
No, I'm not blind. The only countries in recent memory that spend the amount on military that FDR did are North Korea, Iraq under Saddam, and the USSR before it fell. It would be quite obvious if the US were currently spending at that kind of level.
Since most military spending is not disclosed even to the politicians who approve it, I fail to see how it would be obvious.
