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Unemployment was at 14.3% in 1937. I'd hardly call that "booming". Only AFTER we started the buildup to WWII did unemployment reach consistently low levels.
A booming economy doesn't mean that we just magically revert to pre-crash economic levels, and everyone who was out of work instantaneously finds a job. 14.3% unemployment was GREAT compared to the previous years. The economy most definitely was booming from 1933-1936.
Ethereal said:I didn't say the buildup to WWII wasn't a stimulus to the economy, it most certainly was. I'm saying it wasn't a government stimulus plan, and yes, there is a difference.
The difference is semantics.
Ethereal said:Perception is arguably more important to economic recovery than the actual spending.
No it isn't. Maybe if you're talking about chump change for some congressman's pet cause, but not when you're talking about hundreds of billions of dollars.
Ethereal said:WWII provided Americans - employers and employees alike - with three crucial elements for economic growth:
1. Unity of purpose.
2. A tangible and real demand for products and services.
3. A sustainable method for supplying those products and services.
Government stimulus plans lack all three of these components.
#1 is subjective and irrelevant to the economics of the stimulus. Any stimulus, regardless of its purpose, will provide #2. And stimuli rarely provide #3...including during WWII.
Ethereal said:But let's, for the sake of argument, assume that any old spending will do and that a stimulus plan which mirrors the spending plan of WWII would result in a successful economic recovery commensurate with the recovery of the 1940's.
As a percentage of GDP we'd have to spend around 30-40% over approximately five years in order to replicate the kind of spending that was characteristic of WWII [1].
So, unless you plan on spending approximately 5 trillion dollars per year for the next five years, I don't think you've got much of an argument.
You do realize that there is some middle ground between doing nothing and spending 5 trillion dollars per year for the next five years, right?
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