Real GDP declined by over 12% from 1945 to 1947 due to the collapse of government spending at the end of WW2. It took until 1951 for real GDP to rise back to 1945 levels again.
Those are facts, easily verified from the Bureau of Economic Statistics web site. Anybody who seriously states that our men and women came home from WW2 to prosperity and that this disproves Keynesian predictions of economic decline with the decline of government spending at the end of WW2, simply is either lying or an idiot. We had two years of *serious* recession (12% GDP decline ain't a picnic), then four years of recovery before GDP recovered to its 1944 level -- i.e., SIX YEARS of the economy struggling because of the collapse of government spending at the end of WW2. If six years of the economy struggling is prosperity, then my name is Richard Milhous Nixon. Just sayin'.
-- Badtux the Economic History Penguin
Badtux, this was great in the long-form version, too. So when are you gonna explain the 1970s stagflation thang? I remember it from my childhood but don't have much more perspective than that.
ReplyDeleteHmmmph! I started seeing Richard Nixon as a valuable national resource during Reagan's presidency. I must be perfectly honest and tell you that if Nixon were around today I would vote for him early and often with a good heart.
ReplyDeleteJill