WWII Did Not Bring the Depression to an End
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| Also listed in: Evergreen Progressives |
As we hear the comparisons of the current economic crisis to the beginnings of the Great Depression, an accompanying warning is that all the economic actions of the New Deal were ineffective, and it was the entry of the US into World War II in 1941 that ended the Depression. For example here is George Will in today's (Nov 15) New York Times: "…The Depression, which FDR failed to end but which Japan's attack on Pearl Harbor did end…" There is a scary message for us today in that idea, but it ain't so. Here is some data:
In 1930, Gross Domestic Product (GDP) of the United States was $91.2 billion dollars. By 1933, when FDR became President, GDP had fallen to its lowest annual value of $56.4 billion. Under FDR, the United States GDP rose steadily through 1940, the year before the US entered the war, to $101.4 billion. In fact, GDP had recovered to the level of 1930 by 1937; it did decline from that level in 1938 but by 1939 was back again to the 1930 level. It is true that the level of GDP did not EXCEED the 1929 level until 1941, but let's also remember that Pearl Harbor and America's entry into the war did not come about until the end of that year. (http://www.bea.gov/scb/pdf/2008/08%20August/0808_gdp_nipas.pdf)
So it is not necessary to have a war in order to get out of a depression. Armageddon is not a policy tool for economic recovery.
In 1930, Gross Domestic Product (GDP) of the United States was $91.2 billion dollars. By 1933, when FDR became President, GDP had fallen to its lowest annual value of $56.4 billion. Under FDR, the United States GDP rose steadily through 1940, the year before the US entered the war, to $101.4 billion. In fact, GDP had recovered to the level of 1930 by 1937; it did decline from that level in 1938 but by 1939 was back again to the 1930 level. It is true that the level of GDP did not EXCEED the 1929 level until 1941, but let's also remember that Pearl Harbor and America's entry into the war did not come about until the end of that year. (http://www.bea.gov/scb/pdf/2008/08%20August/0808_gdp_nipas.pdf)
So it is not necessary to have a war in order to get out of a depression. Armageddon is not a policy tool for economic recovery.
