Tuesday, February 10, 2009

Just for the sake of argument...

Sen. Minority Leader harangued against the stimulus bill yesterday:
"... we know for sure that the big spending programs of the New Deal did not work. In 1940, unemployment was still 15%. And, it’s widely agreed among economists, that what got us out of the doldrums that we were in during the Depression was the beginning of World War II.”
He's wrong, of course... on any number of levels (I'd start by challenging his assertion that, "it's widely agreed among economists" that the "New Deal did not work.").

BUT: for the sake of argument, let's grant him his premise: that it was WWII that got us out of the Depression.

Okay: exactly HOW did WWII get us out of the Depression?
Is war just a magical tonic? Ought we propose instead of the stimulus package that we start WWIII?

WWII helped get us out of the Depression because the U.S. Government committed oodles of money - Government Spending! - to the war effort. Government spending re-invigorated the entire manufacturing sector.
Absent WWIII wouldn't logic suggest that the Government committing oodles of money to public works projects just might re-invigorate the manufacturing sector, and the economy as a whole?

Bridges require steel & concrete... and the heavy equipment to build a bridge.
Roads require all sorts of manufactured goods - plastics, asphalt, concrete, steel... and the heavy equipment needed to build roads.
Electrical, water, & other energy infrastructure similarly all require manufactured goods & the equipment needed to build pipelines, power lines, treatment plants.
Clean coal? The technology requires equipment - manufactured equipment - and skilled labor to install the stuff.

Even granting McConnell his faulty premise seems to lead us to the need for massive Government Spending to re-ignite the economy.

Have a nice day.

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