Here’s an interesting take….
February 13th, 2009 12:19 pm · 3 comments
on the economic mess.
Keynesian theory, in my limited understanding, holds that in bad economic times, when the people can’t spend money, the government has to, and therefore almost any economic stimulus is better than nothing.
That seems, um, extreme, but Chait makes a point I found compelling. World War II got us out of the Great Depression precisely because government spending - i.e. the government buying tanks and jeeps and guns from private industry in massive amounts - created jobs and thus spending, growth, etc. Wouldn’t the growth have been created just as well if instead of fighting a war the government has just bought the tanks and jeeps and parked them somewhere?
As always, it’s entirely possible I’m missing something.
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Tags: economics · politics
There are currently 3 comments on this blog postView Topic | Comment on this blogfrankomav47
2/13/09
11:26 AM | Post your thoughts and comments about this blog post.
Yes, I see. Very interesting indeed !! 
Now it all makes sense ! |
clanker
2/13/09
11:58 AM | The problem with producing military hardware is there's always someone who wants to put it to use. Also, there's a certain amount of upkeep with keeping things like that in mothballs and over time, some things become obsolete. It's far better to produce things that the country needs, like what is in the stimulus package right now. If we could achieve independence from oil producing countries, then there will be less need for military hardware and much less need to put our troops in harms way. |
cyberscribbler
2/13/09
12:06 PM | QUOTE if instead of fighting a war the government has just bought the tanks and jeeps and parked them somewhere? Cause and effect. We won the war. Industrialized Europe and Japan were in ruins and took years to recover. We were in a unique position to resume our role as the worlds biggest exporter of goods.
So: No, not fighting WWII would have meant that Germany & Japan would have become even greater industrial powers than they are today.
That's why you have to look at more things besides taxes and gov't spending. |
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