Federal Governemnt doesn't cut back on spending in 36, economy is stable by 38 and growing by 39. US intervenes earlier in WW2.
Great Depression in US ends earlier
- Thread starter fortyseven
- Start date
US declares war against Germany after the Fall of France. Allies win by 44?How will this effect Japan's war plans?
Then again, could a more prosperous post-Depression US have gone even more isolationist than OTL ?
raharris1973
Gone Fishin'
What is the extra spending on ?
Is it on relief? Public works projects [so what does the ATL get, or get earlier, than OTL?]?
Or, is it maybe on naval spending that congress authorized but FDR was slow to push ahead with?
Each of them has their own set of foreign and domestic implications.
fortyseven said:
Is it on relief? Public works projects [so what does the ATL get, or get earlier, than OTL?]?
Or, is it maybe on naval spending that congress authorized but FDR was slow to push ahead with?
Each of them has their own set of foreign and domestic implications.
I meant generally, the federal government cut back on spending when there signs of recovery, but the worst part of the Depression hit then, it's debatabl;e thatt if the spending hadn't cut back, then the economy would have recovered earlier.
fortyseven said:
Well, it depends upon what school of economics you come from. Neo-classical/Keynsian economics would say that increased spending might have jump-started the economy. The Austrian school of economics would say it only made it worse. The primary problem is that much of the money spent was to create "busy work" to help get people employed. That only treated the symptoms. And worse still it was robbing Peter to pay Paul, who both had to live and work in the same economy
. It ends up muddling the call and response mechanism of the market. Even if the government did spend money in places where the market would normall go, they didn't spend it on the needs that needed to be met. In other words it was a step backward, not a step forward.Neo-classical/Keynsian economics is considered to be largely debunked and considering that is the primary economic theory FDR was using, I would say it would have to be reduction in spelling and a policy shift toward small business that would have jump started the economy quicker.
Grey Wolf
Donor
david3565 said:Well, it depends upon what school of economics you come from. Neo-classical/Keynsian economics would say that increased spending might have jump-started the economy. The Austrian school of economics would say it only made it worse. The primary problem is that much of the money spent was to create "busy work" to help get people employed. That only treated the symptoms. And worse still it was robbing Peter to pay Paul, who both had to live and work in the same economy
Neo-classical/Keynsian economics is considered to be largely debunked and considering that is the primary economic theory FDR was using, I would say it would have to be reduction in spelling and a policy shift toward small business that would have jump started the economy quicker.
What about Nazi Germany ? Or was Schlacht saying that it wasn't sustainable in the long run ?
However, what occurs to me about the USA is that if they go for a short-term unsustainable boost to the economy a la Nazi Germany, and this merges into a market-orientated upturn, then you have de facto achieved an earlier up-swing that a market-only application of economics would not have done
Grey Wolf
Grey Wolf said:
Nazi Germany was able to jump-start itself based on four factors:
1) They stole wealth from Jews and the rest of Europe and pumped it into their own economy.
2) Hitler was smart enough to let private business do what it does best, along as they would toe the line when the time came.
3) They were building up a war time economy, which created the demand needed to jump-start German markets.
4) There was some artificial hightened demand that comes from command re-structuring of an economy.
I don't know if it was sustainable or not. It ultimately depends on what Hitler would have done if they had won the war. He was smart enough to leave market economy alone to some extent, but he also made economic/logistical decisions that created shortages on the war front.
I really don't see how a artificial re-structuring of the economy can merge with a market up-swing, because each is competing for the same resources and each is most likely going to be doing different things. It's sort of like quantaum mechanics, where in trying to observe something, you tend to destory in the process, because you have to invade the process to observe it. It's about the same with government economy spending. A market economy runs on information, transmitting messages about supply and demand through prices, the stock market, etc. Everything that the government can possibly do to an economy destroys that information by, usually by taking wealth from one location and drop it in another.
The other problem is that a market up-swing will most probably conflict with the regulations and policies trying to bring the economy into and up-swing. Guess what usually wins out?