http://thenextrecession.wordpress.com/2012/08/06/the-great-depression-and-the-war/
Was it necessary for America to go to war in order to establish a
sustained recovery in its capitalist economy or did the New Deal and
Keynesian-type policies of easy money (low interest rates) and fiscal
stimulus (tax cuts and government spending) do the trick well before the war
economy became dominant?
The story of the Great Depression and the war shows is that, once
capitalism is in the depth of a long depression, there must be a
grinding and deep destruction of all that capitalism had accumulated in
previous decades before a new era of expansion becomes possible. There
is no policy that can avoid that and preserve the capitalist sector.
Let Keynes sum it up “It is, it seems, politically impossible for a
capitalistic democracy to organize expenditure on the scale necessary to make
the grand experiments which would prove my case — except in war conditions,”
from The New Republic (quoted from P. Renshaw, Journal of Contemporary History
1999 vol. 34 (3) p. 377 -364).
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