The shrinking Federal Govenment

jaeger19 said:

john.. again.. you fail to account for WHY private investment flooded in. According to the numbers.. a massive loss of government spending, and in fact.. a recession (according to your numbers). I get that you love that it "adds up".. but that's not explaining WHY private investment came in when the predictions were a deep recession, in fact there was a recession.. and there was a massive loss of government spending.. a positive savings rate etc.

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Critter7r said:

Because you're simply making up the fact that a deep recession was predicted. According to my grandfather (who fought in Europe in WWII, by the way), the soldiers (and the rest of the civilians in the country) were giddy with anticipation of all the things they would buy when they got home.

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The standard thinking of the day was that the United States would sink into a deep depression at the war’s end. Paul Samuelson, a future Nobel Prize winner, wrote in 1943 that upon cessation of hostilities and demobilization “some ten million men will be thrown on the labor market.”[3] He warned that unless wartime controls were extended there would be “the greatest period of unemployment and industrial dislocation which any economy has ever faced.”[4] Another future Nobel laureate, Gunnar Myrdal, predicted that postwar economic turmoil would be so severe that it would generate an “epidemic of violence.”[5]

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The primary designers of the new system were John Maynard Keynes, adviser to the British Treasury, and Harry Dexter White, the chief international economist at the Treasury Department.

Keynes, one of the most influential economists of the time (and arguably still today), called for the creation of a large institution with the resources and authority to step in when imbalances occur. This approach was consistent with his belief that public institutions should be able to intervene in times of crises. The Keynes plan envisioned a global central bank called the Clearing Union. This bank would issue a new international currency, the “bancor,” which would be used to settle international imbalances. Keynes proposed raising funds of $26 million for the Clearing Union. Each country would receive a limited line of credit that would prevent it from running a balance of payments deficit, but each country would also be discouraged from running surpluses by having to remit excess bancor to the Clearing Union. The plan reflected Keynes’s concerns about the global postwar economy. He assumed the United States would experience another depression, causing other countries to run a balance-of-payments deficit and forcing them to choose between domestic stability and exchange rate stability.

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JohnfrmClevelan said:

mis-remembering things in your own favor.

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