Obama Releases $3.4 Trillion Budget Plan

nerv14 said:

Spending money on tanks is even more worthless then a bridge to nowhere because even that bridge will have some business on it. But how did WWII bring us out of a depression?

Because it gave jobs to people which allowed them to consume more.

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Incorrect. Because it gave jobs to people while requiring them to consume less.

WWII did two things immediately:

1. Removed a significant quantity of surplus labor from the labor pool
2. Made the government a huge consumer of industrial output.

WWII also accomplished something else--it pushed civilian consumption into the background. Assembly lines producing tanks are not producing cars. Assembly lines producing fighter aircraft are not producing civilian aircraft. Thus while the government was buying huge amounts of war materiel, and thus employing everyone imaginable (and unimaginable, a la "Rosie the Riveter"), it was not giving them the full capacity to satisfy their own economic wants.

Add to the pent up civilian demand the huge demands of Europe and Japan given the total destruction of their economies and you have a level of demand that can sustain economic growth for quite some time--which is exactly what happened.

celticlord said:

Incorrect. Because it gave jobs to people while requiring them to consume less.

WWII did two things immediately:

1. Removed a significant quantity of surplus labor from the labor pool
2. Made the government a huge consumer of industrial output.

WWII also accomplished something else--it pushed civilian consumption into the background. Assembly lines producing tanks are not producing cars. Assembly lines producing fighter aircraft are not producing civilian aircraft. Thus while the government was buying huge amounts of war materiel, and thus employing everyone imaginable (and unimaginable, a la "Rosie the Riveter"), it was not giving them the full capacity to satisfy their own economic wants.

Add to the pent up civilian demand the huge demands of Europe and Japan given the total destruction of their economies and you have a level of demand that can sustain economic growth for quite some time--which is exactly what happened.

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Thats an important point about WWII, but I don't see how that makes any difference to how it was government, defecit spending that got us out of the depression.

During WWII, the government was able to give people large amounts of income that they wouldn't normally have. And simply, that is what government spending for many projects supplies.

And I don't see how "pent up demand" means anything to this debate. What you are infering is like saying that if people were working as hard as they did during WWII to make tanks, and instead they built cars that people could buy, then the economy wouldn't have improved.

Work for the economy that is un war related is not lost, so I would suspect that the economy would have improved faster.


We also have to remember one interesting economic benefit of weapons of war that is normally overlooked from WWII... the US's weapons that it built destroyed large parts of infrastructure around the world. This made it so those people HAD to buy our products after WWII. and trade surpluses are good for economies.

So the miraculous recover after WWII can not be completely attributed to government spending, but the world enviornment at that time.