Austerity, Hoover, Wars & The Great Depression
February 25, 2011 · Posted in General Economics
My 2 cents about the following statement from a NYT article:
But no matter how morally satisfying austerity may be, it’s the wrong answer. Hoover’s austere instincts worsened the Depression. Roosevelt’s postelection reversal helped, but he also prolonged the Depression by raising taxes and cutting spending in 1937. Only the giant stimulus program known as World War II finally ended the Depression. When the private sector is hesitant to spend, the government has to — or no one will.
Here are my comments about Hoover’s austerity and wars as stimulus:
By the way, WWII killed about 500,000 Americans, about 700,000 were injured, many of them for the rest of their lives. That’s a total of around 1.2 million Americans, around 1% of the entire population either decimated or maimed.
I wonder how those people and their loved ones feel the above mentioned author’s “stimulus program” has stimulated their lives?
Also, the WWII years in general were not boom years for the average American at all! They were years of compulsory rationing, government crackdowns, price fixing, 90% taxes, etc.
What did happen was that after the war the federal US government reduced its involvement by two thirds, lifted burdens upon its citizens, and allowed for a dynamic and vibrant market to spring up once more, precipitating what is commonly known as the post war boom with a constantly declining poverty rate until the Great Society programs put an end to that as well.