WW2 as an economic model.

[BlueStreak]

In recent months there has been a lot of talk about FDRs policies, WW2, the effects of these two things on the economy and how they relate to the current situation.

In the late 1930's defense production began to increase in order to meet the demands of the "Lend/Lease" program. By 1944 defense production reached levels previously unparalleled in human history. In the decades following the second world war, defense production dropped, but only briefly, as weapons had to be produced in order to maintain the arms race, and service the Korean and Vietnam wars.

Now, bear in mind, up until the late 1960s or so, the heavy industries of most of our international competetors, Germany, Japan, France, Italy, etc. layed in ruins.

This period from the late 1930s until the early 1970s or so, was also undeniably the most prosperous periods in American history. We had an economic expansion that was the envy of the world.

Now, I stand back and look at this era, and I can't help but wonder;

1) Could it be said that this model represents "massive government spending"?
And could the same result be acheived through "infrastructure" spending
instead of, or in addition to, defense spending?

IMO, Yes.

2) Could it be said that this model also represents "isolationism"?
Given the fact that our industries had little to no competition during
this era, and our government maintained steep import tariffs, I would have
say; "Yes".

However, with todays model of "Globalization" the game has changed a bit, hasn't it? Isolationism on the level of the 1950s would be far more difficult, if not impossible. But we can build and/or repair infrastructure, we can build schools and repair/expand our highways/railways/airports, etc.

So, maybe this "massive government spending", as scary as it sounds, isn't such a bad thing? So long as we spend the bulk of it domestically, rebuilding our cities, industries, and other things that benefit American citizens, that is.
And, by extension, buying the things that we must from other countries should help lift beleagured economies abroad as well.

Maybe if the current administration spent more time billing the "stimulus" as "investment", there wouldn't be as much uproar as we have today?

Just a thought.

Whadda ya say?

Regards,
Dave

[Zeke]

Maybe if the current administration spent more time billing the "stimulus" as "investment", there wouldn't be as much uproar as we have today?

That's what they did.

"The American Recovery and Reinvestment Act of 2009."

(The turgid with bile Republicans were the smear campaign of fear: because their since-Reagan military spending cow might be gored. That and, well, they're idiots.)

[piece-itpete]

Curious - why hasn't the almighty Obama Pelosi & Reid (the three stooges) taken care of the military spending problem?

Anyway it doesn't quite hold up. For starters any tariffs at all, you get a trade war which would be disasterous for the economy. Second, there was so much pent up consumer demand after ww2, which we can't replicate.

I'd have a lot more respect for the porkulous bill if the majority of the dough actually went into infrastructure. I did indeed vote for a statewide levy a while back that was specifically earmarked for bridges and roads, but the politicos don't like that - it interferes with their handouts.

Pete

[Charles]

You can't spend yourself rich, especially when you're already broke.

We need to come up with a way to get industry up and running and people back to work producing wealth so we have a tax base. Government spending doesn't create wealth, it siphons it off.

Chas

[Zeke]

We need to come up with a way to get industry up and running and people back to work producing wealth so we have a tax base.

Then, we need either a war, or a nation or two to rebuild after we've pummeled them: whether they required it or not.

Oh, wait... :mad:

[BlueStreak]

You can't spend yourself rich, especially when you're already broke.

We need to come up with a way to get industry up and running and people back to work producing wealth so we have a tax base. Government spending doesn't create wealth, it siphons it off.

Chas

Really? Even when the "government spending" is directed towards private industry, in the form of orders for materials, goods and services required to build bridges, highways, etc. and then these facilities are then used by private industry? So, you would have me believe the Eisenhower Interstate Highway System has never been an asset to to industry and commerce? T.R.s Panama Canal a total waste of time and money that has never benefitted anyone? The Hoover Dam? The list goes on and on..........

This is the GOP that I miss. The GOP that builds. Whatever happened to them. When did they turn into the assholes that they are today, with all of this "NO YOU CAN"T!", "LET IT FAIL!", "AMERICAN WORKERS ARE LAZY AND OVERPAID!", etc., etc., ad nauseum?

That's what I want to know.

Dave

[noonereal]

Then, we need either a war, or a nation or two to rebuild after we've pummeled them: whether they required it or not.

Oh, wait... :mad:

how does spending on a war rather than infrastructure help us?

What were the economic benefits of Vietnam for example?

[rickr15]

We need to come up with a way to get industry up and running and people back to work producing wealth so we have a tax base. Government spending doesn't create wealth, it siphons it off.

Chas

Not gonna happen as long as the Chinese,Koreans etc can make a finished part cheaper than an American firm can even buy the raw material.

If the Yuan was priced at what its really worth the trade deficit might ease a little and that would help.

[Fast_Eddie]

Curious - why hasn't the almighty Obama Pelosi & Reid (the three stooges) taken care of the military spending problem?

Gotta fix the wars before you cut the spending.

[Charles]

Not gonna happen as long as the Chinese,Koreans etc can make a finished part cheaper than an American firm can even buy the raw material.

If the Yuan was priced at what its really worth the trade deficit might ease a little and that would help.

I would say you have a point.

Chas

[Charles]

Really? Even when the "government spending" is directed towards private industry, in the form of orders for materials, goods and services required to build bridges, highways, etc. and then these facilities are then used by private industry? So, you would have me believe the Eisenhower Interstate Highway System has never been an asset to to industry and commerce? T.R.s Panama Canal a total waste of time and money that has never benefitted anyone? The Hoover Dam? The list goes on and on..........

This is the GOP that I miss. The GOP that builds. Whatever happened to them. When did they turn into the assholes that they are today, with all of this "NO YOU CAN"T!", "LET IT FAIL!", "AMERICAN WORKERS ARE LAZY AND OVERPAID!", etc., etc., ad nauseum?

That's what I want to know.

Dave

We're still broke.

Chas

[Zeke]

how does spending on a war rather than infrastructure help us?

What were the economic benefits of Vietnam for example?

1. Iron? Steel? Shipbuilding? Munitions? Overseas infrastructure, built by us, at a profit?

2. Nothing, considering how we tried to do that on the cheap and never committed. Oriskany, Intrepid, Hancock, Ticonderoga, Bennington, Yorktown, New Jersey, etc? We used 25-year old ships against a 3rd World "power"...

[noonereal]

1. Iron? Steel? Shipbuilding? Munitions? Overseas infrastructure, built by us, at a profit?

So the war goods we sold benifited us? That I agree with. Can't we do that (as many countries do) without being part of the conflict?

2. Nothing, considering how we tried to do that on the cheap and never committed. Oriskany, Intrepid, Hancock, Ticonderoga, Bennington, Yorktown, New Jersey, etc? We used 25-year old ships against a 3rd World "power"...

How could the Vietnam war have benefited us economically if we did not "do it on the cheap?"
If we built new ships for ourselves aren't we just redistributing income with no long term gain? (unless we use them to seize the wealth of another country)
If we build them for other nations isn't that a win win? (unless they turn and fire on us)

[noonereal]

We're still broke.

Chas

Yes, but his point was that if we used the money as capital investment it could both stimulate the economy immediately and provide and on going revenue source that would more than pay for itself. To my mind, a smart move when 18% of working folks ain't workin'.

[Charles]

how does spending on a war rather than infrastructure help us?

What were the economic benefits of Vietnam for example?

At least building infrastructure can be used for the creation of wealth. The best I understand, the interstate highway system was built to make the transfer of war materials more efficient.

And while we need a military, it doesn't actually create wealth. It does create jobs, and the connected may grow wealthy, but it is funded by taxes on the producers of goods and services, and by the government taking on additional debt.

We do have to pay, or at least create the illusion that we are paying, interest on that debt.

Chas

[Charles]

Yes, but his point was that if we used the money as capital investment it could both stimulate the economy immediately and provide and on going revenue source that would more than pay for itself. To my mind, a smart move when 18% of working folks ain't workin'.

I agree, we need to jump start the economy, get people back to work, spending money, and paying taxes.

The current administrations focus on sustainable growth (green energy, higher prices on carbon based energy, reduced demand for consumer goods) will actually slow growth and put more people out of work.

Chas

[Zeke]

If we built new ships for ourselves aren't we just redistributing income with no long term gain? (unless we use them to seize the wealth of another country)

Uh, I don't want to be the one, but isn't that the point of our Bush-era Imperialism? :D

[Charles]

Hate to say it, but Shrub just wasn't cut out to be an imperialist. He did it all wrong.

Chas

[BlueStreak]

We're still broke.

Chas


And we will remain broke until we get serious about investing in our own industries and people.

Dave

[BlueStreak]

Yes, but his point was that if we used the money as capital investment it could both stimulate the economy immediately and provide and on going revenue source that would more than pay for itself. To my mind, a smart move when 18% of working folks ain't workin'.

That's right, That is exactly the point I seek to make.

Dave

[BlueStreak]

At least building infrastructure can be used for the creation of wealth. The best I understand, the interstate highway system was built to make the transfer of war materials more efficient.

Chas

He gets it at last. On your second point, however; How many times has it actually been used for that purpose? Lets see, there was the mass movement of troops during the Cuban Missle Crisis, then there was......................

But, it's been used for commerce and the creation of wealth twenty four hours, every single day of the year since it's creation.

I tend to think Ike used the "transport of war materials" argument more to persuade the Hawks in his own party to sign on with the program than anything else. Although it certainly can and has at least once, been used for that purpose.

Regards,
Dave

[merrylander]

Well good roads are important, going back in time Brookeville, a wide spot in the road south of us was where Madison brought the government when the British were burning down the Whitehouse. Nowadays it is not even a half hour drive from one to the other.

[Charles]

He gets it at last. On your second point, however; How many times has it actually been used for that purpose? Lets see, there was the mass movement of troops during the Cuban Missle Crisis, then there was......................

But, it's been used for commerce and the creation of wealth twenty four hours, every single day of the year since it's creation.

I tend to think Ike used the "transport of war materials" argument more to persuade the Hawks in his own party to sign on with the program than anything else. Although it certainly can and has at least once, been used for that purpose.

Regards,
Dave

So I finally get it. Kind of, anyway.

Now that I've become so politically and economically astute, I may just run for King of Bugtussell.

Chas

[BlueStreak]

And a good King you would surely be!

Have a most excellent holiday, your Royal Majesty!:D

Dave

[Charles]

And a good King you would surely be!

Have a most excellent holiday, your Royal Majesty!:D

Dave

I do have a tendency to get as drunk as a lord.

Worked for Churchill.

Enjoy your holiday as well.

Chas

[merrylander]

As Winnie would have said let's KBO.

[Zeke]

I do have a tendency to get as drunk as a lord.

Any beverage that begins with the word, "Glen," is my muse... :D