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Originally posted by Audace
You are of course right...that's the problem with economics as a science, it's still largely guessing. BTW, i was thaught in HS that it was WWII that was the biggest contributor to solving the depression, not the New Deal....one of the reasons why Keynes has gone out of fashion....but i probably remember things a bit too much b/w..... |
It was the New Deal that killed the Depression. But WWII kicked the US economy into high gear, because suddenly everybody had a job--but note: who was the final employer? Not the (for example) steel companies manufacturing torpedo casings, but the US government that gave out contracts to the industries. The war provided the goal, but it was the US government that provided the money, the focus, the contracts and the jobs.
On a somewhat different note, I've been very impressed with Alexander Hamilton's logic and that of his fellow Federalists in managing the nascent US economy of the late 18th and early 19th century. What's interesting is that even Jefferson, a man who was ideologically opposed to the idea of anything save minimalist government, came around to seeing the necessity of using federal might as a means to raise the government's coffers, and deploy the country's power on a scale he hated in theory. Henry Adams' history of the Jefferson, Madison and early Monroe administrations takes a kind of pleasure at explaining how the early budget worked, and I find it fascinating.