It is the most foolish thing in the world to say that the Second World War ended the Depression

[ThomWV]

When it is said in the sense that war is required to clean the slate and give fresh ground for the total rebuilding of the economy once a 'real' depression sets in you may rest assured that you are being fed delusional shit. What it takes is public works on a scale akin to war to set the stage for a new economic awakening. One thing has to be added to the mix though, and for this we can look back to the Second World War as the only time we, as a nation, were smart enough to provide essentially free education to the completion of a college degree of their choosing to our veterans. Expand that sort of educational opportunity to the workers who get themselves back on track with the employment massive public service works will provide and you have the keystone for a sound economy going into the next century.

No war is needed to save us but Public works on a scale equal to world war and higher education for the largest number of people possible; those my dear friends are the keys to a successful future for us.

[Captain Hilts]

1. But public works weren't enough. You had to scare the shit out of oppoonents to the New Deal...

to make them 'get' it.

[NOW tense]

2. I have always had it drilled into my head that it was WWII...

I think you are right. We cannot go back to what we were doing before this either. We have to learn from the past mistakes and become a community again too. We need to create our own new energy economy and start living smarter and nicer to our neighbors domestic and foreign.

[RoyGBiv]

3. What WWII did ...

It demonstrated that the basic logic behind the New Deal, i.e. massive public spending, does in fact work.

The problem with the New Deal as it was practiced is that it didn't go far enough. It was *too* timid. The spending involved with WWII did in fact help lift us out of the Depression more quickly than we would have otherwise, but that is certainly not to say that the war was *required*. It was only required in the sense that some segment of the population has developed this asinine idea that public spending on war/killing people is fine and dandy, but spending on jobs, health, education, etc. is somehow a burden.

[FarCenter]

5. Spending on public works does not give the same benefits as winning a global war

WW II also left the economies of most other countries in shambles -- Germany, Italy, Japan were economically destroyed; most of the western USSR and Central Europe likewise. England had been heavily bombed, and China had been invaded by Japan and then suffered through the communist revolution.

So the comparative economic advantage gained by the US was huge.

Secondly, as part of our role in supplying weapons and goods to the winning side, we scarfed up all the gold in the world and put it in Fort Knox. So besides having a huge "real economy" advantage, we also had an unassailably dominant financial position.

No amount of running up debt to provide for spending on public works will provide benefits similar to entering WW II after 2 years of fighting and then participating as a decisive winner with little damage and light casualties.

[RoyGBiv]

6. Granted ...

Well, partially granted ...

But this doesn't invalidate the point. It only obscures it and is used intentionally to obscure it. In fact your last comment that begins with "No amount ..." is the beginning of the obfuscation.

While the impact of the global war and, more importantly, the economic opportunities left to the US in the post-war era were indeed extreme, it does not naturally follow that what is required to achieve those kinds of results is a war, nor does it naturally follow that had WWII not provided those opportunities that recovery would not have happened. Much of the current, non-Friedman-esque research into Depression era history in the last few decades has been focused on exactly this. To what degree were the New Deal programs working to reverse the effects of the Depression, and was the global war a necessary factor in any recovery?

What has emerged, using rather straightforward models and actual data, is a picture of the economy in a distinct recovery period prior to about 1936/37, at which point FDR backed off and reduced spending in essential areas married to that recovery. The problem we have in seeing this, and the problem modern attempts to emulate FDR's measures, is that the trough was so deep that the strict definition of recovery (achieving baseline GDP prior to the contraction and then rising over it) had not been reached. Thus one can correctly say that the New Deal didn't work, but only within a narrow context. The point is that it wasn't given time to work before political pressure and some old-fashioned ignorance removed the stimulus that was driving the recovery.

And then the bottom all but fell out again.

By the time FDR and his administration realized this, WWII was upon us, and the equation changed.

Moreover, much of the continued betterment of the economic outlook that took place in the wake of WWII was driven by those New Deal programs that were still in place. While the post-war economic boom is clearly related to all the elements you mention, whether the U.S. would have been able to take advantage of them in the manner it did without the New Deal is an unknowable question.

[Spider Jerusalem]

4. There are a few small problems with that, I'm afraid.

First: the theoretical basis of capitalism is fundamentally flawed, as it presumes an infinitely rising curve of economic expansion. The stated target for the US government, and Western governments in general, is a three percent per annum growth rate for the remainder of this century. This is not only unfeasible but impossible; at that rate of expansion, the US economy would double in 23 years. A doubling of the economy means a doubling of resource consumption and manufacturing output--which, given that many resources are non-renewable, such as oil, natural gas, metallic ores, and so on, is simply NOT sustainable. A radical shift in the way most people in the developed world, and most specifically in the USA, live, is going to be necessary.

Second: higher education is NOT a feasible or achievable goal for everyone. It is an unpleasant but nonetheless unavoidable fact that some people lack the inherent capacity for higher education; attempting to force people who really lack the intrinsic ability to be educated at a university level leads inevitably to the decline of academic standards and grade inflation so as to pass the largest possible percentage of students. (This is also the problem with mandated testing standards in programmes like 'No Child Left Behind', by the way.)

[dflprincess]

7. Basically, capitalism is nothing but Ponzi scheme

"as it presumes an infinitely rising curve of economic expansion".