Should we have entered WWII? It was financed with deficit spending, and sharply increased the national debt (admittedly, we mostly owed the money to ourselves). Is there truth to the old claim, that WWII got us out of the Great Depression? If so, how? Is there such a thing as an economic multiplier, such that if I spend a dollar on your product, you spend the dollar on someone else's product, and so on, and the end result is an increase to GDP > $1?
Sure, in nominal terms. However, as a percent of GDP: http://www.usgovernmentspending.com/debt_deficit_brief.php <img src="http://www.usgovernmentspending.com/include/us_debt_200.png">
Unless my math is off If Obama came into office with 10.6 trillion in debt and today its 15 he still didn't add more then every President combined Again I'll add that Obama didnt come into office with a balanced budget and turn it into 5 trillion in debt like Bush did
I think so True. Are you OK with the fact that $20B of that was for the Manhattan Project? I fail to see how that matters. Whether the treasury owes the citizens or a foreign country it stills owes. It's my understanding there is at least some truth to it. If I'm not mistaken we were already starting to slowly grow out of it and then even before we entered the war we were already producing arms for the countries already engaged. I assume this is where you hope I'll say government deficit spending If I understand how GDP is calculated, yes. Although I don't think your analogy holds water if you're comparing it to our current situation. The government spent money during WWII with greater efficiency than we do now. The government was MUCH smaller than it is now. For some time after the war the US was the top producer of many goods and services, allowing us to earn our way out of debt. For several reasons including global competition this is NOT true today. Also I think we started out with the magnitude of debt we have now. IOW I don't see us deficit spending our way to prosperity, not like we did then. Probably not at all.
I have mixed feelings about the bomb, like the inventors did. But, the technology was emerging anyway, so I'm glad we have it. It is a very important difference, from foreign debt, that we mostly owe (and owed) ourselves. Yes, the government still has to pay, but when it does pay, the money stays here. And don't forget, taxes were raised sharply because the war was, basically, a crisis that needed to be paid for. I agree, conditions today are not like those of the '40s. Thanks to the Crash of 2008, the US will be very different for a long time (I hope, I mean I hope the lesson is not soon forgotten). Unlike after the end of WWII, we won't loan (big program) money to the world and have them pay it back in spades as they buy our stuff. I do think deficit spending today would be less effective for those reasons, but I don't think it's completely ineffective, in fact I think it's still quite important. As long as Americans can produce goods that it and world will buy, then all measures to keep them doing so should be taken, even if those measures cost money, because without the sales, without the revenue, there is no America, not like we've known. Some deflation (there's a fair chance it's more restructuring than decline) of empire is inevitable and already underway, but there is no fundamental reason to make it runaway. [Re our "decline", I hope you read the pieces I linked to in the 'America is doomed (ver. 5.0) thread--they're good scholarship.]
+1 Regarding the bomb. The tech race was on. If germany had gotten it first, they already had a delivery system, and we live in a different world today. We had to win that race, and we did.