afaik it's generally accepted. It was not until the United States entered World War II that Roosevelt's ideas for massive public expenditures and deficit spending truly began to bear fruit. Roosevelt's administration, of course, had little choice but to increase expenditures, given the war effort. Even given the special circumstances of war mobilization, New Deal policies seemed to work exactly as predicted, winning over many Republicans, who had been the New Deal's greatest opponents. When the Great Depression was brought to an end by the Second World War, it was obvious that the turnaround had been caused primarily by the reinforcement of business through government expenditure.
In truth, Roosevelt had foreseen from early in his Presidency that only a solution to the international trade problem would finally end the depression, and the New Deal was, to no small extent, a "holding action". However, the intensity of the economic crisis convinced him that before the world situation could be dealt with, the United States would have to put its own fiscal house back in order. His original conception was that the New Deal would restore circumstances which would allow for a return to balanced budgets and an international gold standard. It was only gradually he came to the conclusion it was essential to remake the U.S. economy in a more extensive fashion, particularly because of the "Roosevelt Recession" of 1937, when he had balanced the budget by restricting fiscal support to the economy. Thus, the statement "it was World War II that ended the Depression", while often asserted by partisans as proof the New Deal "failed" is, in fact, the view that the architects of the New Deal themselves saw as the reality: as long as Europe was marching towards war, Japan was engaged in imperial conquest, and the international debt and trading system were still organized in an attempt by creditors to be paid back for World War I at pre-war values for gold, that a full solution to the economic crisis was impossible. http://en.wikipedia.org/wiki/Great_depression#In_the_United_States >Wow, if that's what you think happened to end the depression, wow. > >Umm, socialism in America? WW 2? > >That's what ended the depression, one that wouldn't have happened in the >first place were they truly following models closer to his. The huge over >rating in the market, the runs. I mean it was almost an entirely artificial >depression, created to make the rich richer. > >Jesus. > >Tim >> >> It may sound pompous, I dunno. But according to the >> macroeconomics I learned, the ideas you have been talking about >> prolonged the depression by perhaps five years. Sure, in the long >> run the economy would have recovered on its own but as the man >> said, "in the long run we are all dead." Keynes' ideas were >> applied and the Depression ended. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Message: http://www.houseoffusion.com/lists.cfm/link=i:5:194716 Archives: http://www.houseoffusion.com/cf_lists/threads.cfm/5 Subscription: http://www.houseoffusion.com/lists.cfm/link=s:5 Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=89.70.5 Donations & Support: http://www.houseoffusion.com/tiny.cfm/54
