Image via WikipediaWho you gonna believe? Some professional investors or a professional Keynesian? I'm going with the capitalists, and not the sour-faced NY Times columnist. (Note: bolding and links are mine.)
Krugman wrote another Op-Ed about his favorite subject "1937". The year when the Fed Gov't cut back some spending and the economy faltered. I've disputed this ludicrousness before, stating that if EIGHT years of spending didn't fix the problem, when in the hell is all this spending supposed to work? Let's also not forget that in 1934 the dollar was devalued by 50% and THAT didn't work.
In this particular Op-Ed he goes further, stating "From an economic point of view World War II was, above all, a burst of deficit-financed government spending, on a scale that would never have been approved otherwise. Over the course of the war the federal government borrowed an amount equal to roughly twice the value of G.D.P. in 1940 — the equivalent of roughly $30 trillion today".
Pro-WWII end recession/depression economist LOVE to point out that huge spending on a massive scale ended the Great Depression. I've spoken to many of these people before and asked them EXACTLY when this massive spending ended the Great Depression. There are only two answers: 1) When the war started 2) After the war ended
Let's tackle #1 first (When the war started). These are the scariest people in the world today, because they don't believe in freedom in the least.
You'll need to visit the site for the whole thing. More at the Motley site.
-jR
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