I’m curious about something. Conservatives are forever reminding us liberals that the New Deal didn’t get us out of the Great Depression. It was World War II that got us out of the Great Depression. And roughly speaking, that’s true enough.
So why, then, isn’t that a good model for getting us out of our current slump? WWII featured five years with federal deficits above 10% of GDP, three of which were above 20% of GDP. And although WWII might have been a good thing for global freedom, all that spending was for war materiel that was completely useless to the U.S. economy. If we repeated this today, we could do better than that even if half the stimulus spending was meaningless makework.
So what’s the deal? Did WWII rescue the American economy or not? And if it did, what’s the argument for not trying it again, but without the war?