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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: mishedlo who wrote (96558)	4/17/2009 11:13:06 AM
From: koan	Read Replies (2) of 116555

Not my point mish. I was saying WWII cleard all the political road blocks to allow large stimulous spending. Wars are the worst way to spend stimulous money. Krugman was saying stimulous spending is needed and is best spent on infrastructure, but if political road blocks are set up then just bury the money in a mine and let peopel dig it out. WWII is the metaphor for the mine. Non productive spending like war is. But the stimulous is what krugman feels is important. Although Hitler did have to be stopped. My point was that WWII allowed the government to spend gigantic amounts of stimulous money without roadblocks. Every person in the country was working. ) unemplyment. Even women were put into jobs usually held by men like "Rosie the riveter". Krugman was saying we need to spend huge amounts of money to restart the economy. But if politcal road blocks, as we are seeing now, are raised, then putting money in a mine (giving out the money) is better than nothing. It was the stimulous of WWII that created full emplyment (not the war itself) and that was because there were no political roadblocks to gigantic amounts of spending. The goveernment could and did freely spend as much money on the war as it wanted. That stimulous money put everyone back to work. This allowed people to pay down their debts, start businesses, increases tax revenues and set up the prosperity of the 50's. I posted a graph that Krugman put up that showed how in 1932 people had huge debt and how that debt fell constantly all through the 30's and 40's and even government debt first went up and then fell as well, so that both individual debt and government debt were very low by 1945/50? >> So think about it. What was WWII? No political road blocks to spending huge amounts of money. Enough money to effect super OVER full imployment. Even women worked for the first time in factories. Two income families for the first time. WWII was an unmitigated disaster. The US came out of it with flying colors only because our productive capacity was not destroyed. Much of the rest of the world's was. It took decades for many nations to recover. One cannot look at one country in isolation. One has to look at the entire picture and tie it all together. You would feel a lot different about WWII if your parents home was destroyed in it and you lost everything and I mean everything. Mish

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