# "The New Deal didn't end the Great Depression, WWII did!" **URL:** \ **Category:** Great Debates\ **Created:** [June 2, 2010, 10:25pm UTC](https://boards.straightdope.com/t/the-new-deal-didnt-end-the-great-depression-wwii-did/541701 "2010-06-02T22:25:46Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [June 3, 2010, 5:33am UTC](https://boards.straightdope.com/t/the-new-deal-didnt-end-the-great-depression-wwii-did/541701/41 "2010-06-03T05:33:05Z")
> [@pdh144](#): > > That’s the great secret. The new deal by about '37 had improves little in terms of employment (though relief checks were temporarily pleasing)… It took siphoning millions OUT of a competitive labor pool to bring employment to a healthy level _sigh_ cutting unemployment from 25% to 15% is hardly little. Remember, some of the work created by the New Deal was the WPA, which was hardly a matter of breaking windows, but building an infrastructure we still use today. Sure, today in hindsight we know he should have done more, but at the time spending all this money was very brave. And effective. Let’s not forget the psychological aspects. Both my parents grew up at this time, and my grandfather had to survive it, and they all loved FDR because he actually seemed to care if people had jobs and support, unlike Hoover. ---
**Author:** ![jinty](https://avatars.discourse-cdn.com/v4/letter/j/dbc845/32.png) [@jinty](https://boards.straightdope.com/u/jinty)\ **Post date:** [June 3, 2010, 12:41pm UTC](https://boards.straightdope.com/t/the-new-deal-didnt-end-the-great-depression-wwii-did/541701/42 "2010-06-03T12:41:11Z")
> [@The\_Hamster\_King](#): > > How did having a world war get us out of the doldrums? What was the mechanism? One factor, rarely mentioned, is that early in the war (1939-40) Britain and France (both superpowers at the time albeit in decline) practically bankrupted themselves buying arms from the USA. This was a great, and fortuitous, leg-up that makes WW2 look like a better boost for the US economy than it actually was. [QUOTE=Wikipedia] During the 1939–1942 period, the UK depleted much of its gold stock in purchases of munitions and weaponry on a “cash and carry” basis from the U.S. and other nations. [/QUOTE] > **[Gold standard](https://en.wikipedia.org/wiki/Gold_standard#Depression_and_World_War_II)** > > A gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold. The gold standard was the basis for the international monetary system from the 1870s to the early 1920s, and from the late 1920s to 1932 as well as from 1944 until 1971 when the United States unilaterally terminated convertibility of the US dollar to gold, effectively ending the Bretton Woods system. Many states nonetheless hold substantial gold reserves. > Historically, the si... ---
**Author:** ![Ludovic](https://avatars.discourse-cdn.com/v4/letter/l/7ab992/32.png) [@Ludovic](https://boards.straightdope.com/u/Ludovic)\ **Post date:** [June 3, 2010, 12:51pm UTC](https://boards.straightdope.com/t/the-new-deal-didnt-end-the-great-depression-wwii-did/541701/43 "2010-06-03T12:51:39Z")
> [@Oakminster](#): > > Then you go back to small government, low taxes, and limited spending. The war and postwar period (even up until the late 70s) had some of the highest tax rates in the history of America. If they had tried to make the people feel good by keeping tax rates low while spending or having spent as much as they did, we’d have been Greeked by now. We’re heading down that road currently. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [June 3, 2010, 1:01pm UTC](https://boards.straightdope.com/t/the-new-deal-didnt-end-the-great-depression-wwii-did/541701/44 "2010-06-03T13:01:27Z")
> [@Oakminster](#): > > You know I’m an atheist, right? > > I’m saying what should the money be spent on? Screen doors on submarines? Wrong answer. Vetoed. New highway that would substantially increase capacity? Hmmm. Maybe. Tell me more about it. > > Could be I got a little target-locked on the idea of building cars with public funds just to let them rot in the desert. Ok, you can say porn does more for the economy than Bibles because you like porn more. But other than expressing a personal preference for one over the other, you haven’t really explained why the economic effect would be different for one over the other. In other words, I read your arguments as saying that a ton of bowling balls must be heavier than a ton of feathers, because bowling balls are heavier. I truly do no understand why building tanks would be more stimulative than building cars. ---
**Author:** ![jk1245](https://avatars.discourse-cdn.com/v4/letter/j/49beb7/32.png) [@jk1245](https://boards.straightdope.com/u/jk1245)\ **Post date:** [June 3, 2010, 3:04pm UTC](https://boards.straightdope.com/t/the-new-deal-didnt-end-the-great-depression-wwii-did/541701/45 "2010-06-03T15:04:32Z")
I usually stay out of these threads as I am no economist, but it seems to me the conservative argument should be that the New Deal would’ve been OK had it been temporary. The deficit spending for WW2 is acceptable because it ended with the end of the war. Obviously the US still spent lots of money on the military, but not to WW2 levels. Would conservatives (I mean traditional fiscal conservatives, not the lunatic fringe that seems in vogue today) be OK with temporary New Deal style deficit spending? **Oakminster** points out that these programs can be difficult to stop once they get going, which is a valid point. That, I think is the real objection that could be made. These programs tend to live on long after the crisis has passed, whereas war spending doesn’t. ---
**Author:** ![Dick\_Dastardly](https://avatars.discourse-cdn.com/v4/letter/d/c4cdca/32.png) [@Dick\_Dastardly](https://boards.straightdope.com/u/Dick_Dastardly)\ **Post date:** [June 3, 2010, 3:24pm UTC](https://boards.straightdope.com/t/the-new-deal-didnt-end-the-great-depression-wwii-did/541701/46 "2010-06-03T15:24:55Z")
WW2 was the largest government spending program in history. The economic effect of all the government spending on armaments etc. would have been exactly the same had we simply tipped all the airplanes, tanks, etc. into the sea instead of fighting a war with them. WW2 actually makes the best case possible for massive fiscal stimulus to return a depressed economy to full capacity. ---
**Author:** ![Dick\_Dastardly](https://avatars.discourse-cdn.com/v4/letter/d/c4cdca/32.png) [@Dick\_Dastardly](https://boards.straightdope.com/u/Dick_Dastardly)\ **Post date:** [June 3, 2010, 3:28pm UTC](https://boards.straightdope.com/t/the-new-deal-didnt-end-the-great-depression-wwii-did/541701/47 "2010-06-03T15:28:28Z")
> [@Tom\_Tildrum](#): > > There’s a complication, though, in that in 1937 the Fed also tightened its monetary policy, so it’s hard to separate the fiscal causes of the later Depression from the monetary causes. > > If memory serves, military spending on a war usually produces a recession when it’s over, because of the difficulty the returning soldiers have in finding employment before peacetime production can ramp back up. WWII was unique in not having such a recession in the US because it was so destructive to the rest of the world. US firms enjoyed an unprecedented competitive advantage. A competitive advantage to do what? It’s hard to export anything when your trading partners’ economys are in ruins. Global trade took thirty years to pick up after WW2, the US economy grew in the postwar years due to massive domestic demand. ---
**Author:** ![Dick\_Dastardly](https://avatars.discourse-cdn.com/v4/letter/d/c4cdca/32.png) [@Dick\_Dastardly](https://boards.straightdope.com/u/Dick_Dastardly)\ **Post date:** [June 3, 2010, 3:35pm UTC](https://boards.straightdope.com/t/the-new-deal-didnt-end-the-great-depression-wwii-did/541701/48 "2010-06-03T15:35:13Z")
A nice chart : [![](https://farm5.static.flickr.com/4058/4666037681_9123afcd4d.jpg) ](https://farm5.static.flickr.com/4058/4666037681_9123afcd4d.jpg) ---
**Author:** ![ralph124c](https://avatars.discourse-cdn.com/v4/letter/r/8797f3/32.png) [@ralph124c](https://boards.straightdope.com/u/ralph124c)\ **Post date:** [June 3, 2010, 3:42pm UTC](https://boards.straightdope.com/t/the-new-deal-didnt-end-the-great-depression-wwii-did/541701/49 "2010-06-03T15:42:38Z")
One thing that hasn’t been discussed-the reason why the world did NOT relapse into depression, after the end of WWII. It was that the USA needed to build/repair an infrastructure that had decayed for the past 16 years. Also, Europe needed to rebuild ruined ports, factories, mines, and cities (over 40% of the city housing in Germany had been wrecked). This demand kept things going till the late 1960’s. ---
**Author:** ![Hentor\_the\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/h/8edcca/32.png) [@Hentor\_the\_Barbarian](https://boards.straightdope.com/u/Hentor_the_Barbarian)\ **Post date:** [June 3, 2010, 3:52pm UTC](https://boards.straightdope.com/t/the-new-deal-didnt-end-the-great-depression-wwii-did/541701/50 "2010-06-03T15:52:56Z")
> [@Dick\_Dastardly](#): > > A nice chart : > > [http://farm5.static.flickr.com/4058/4666037681\_9123afcd4d.jpg](http://farm5.static.flickr.com/4058/4666037681_9123afcd4d.jpg) What, am I invisible? No wonder I have to repeat the same shit over and over in these threads. ---
**Author:** ![Tom\_Tildrum](https://avatars.discourse-cdn.com/v4/letter/t/e95f7d/32.png) [@Tom\_Tildrum](https://boards.straightdope.com/u/Tom_Tildrum)\ **Post date:** [June 3, 2010, 3:57pm UTC](https://boards.straightdope.com/t/the-new-deal-didnt-end-the-great-depression-wwii-did/541701/51 "2010-06-03T15:57:24Z")
> [@Dick\_Dastardly](#): > > A competitive advantage to do what? It’s hard to export anything when your trading partners’ economys are in ruins. Global trade took thirty years to pick up after WW2, the US economy grew in the postwar years due to massive domestic demand. But domestic firms were able to thrive on that domestic demand because they lacked foreign competition. Look at how the US car industry boomed after WWII and eroded after German and Japanese competition resumed. It’s not correct to say that WWII ended the Depression. The devastation of WWII ended the Depression – here. ---
**Author:** ![Hentor\_the\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/h/8edcca/32.png) [@Hentor\_the\_Barbarian](https://boards.straightdope.com/u/Hentor_the_Barbarian)\ **Post date:** [June 3, 2010, 4:03pm UTC](https://boards.straightdope.com/t/the-new-deal-didnt-end-the-great-depression-wwii-did/541701/52 "2010-06-03T16:03:26Z")
> [@jk1245](#): > > Would conservatives (I mean traditional fiscal conservatives, not the lunatic fringe that seems in vogue today) be OK with temporary New Deal style deficit spending? > **Oakminster** points out that these programs can be difficult to stop once they get going, which is a valid point. That, I think is the real objection that could be made. These programs tend to live on long after the crisis has passed, whereas war spending doesn’t. What does this mean? Please don’t just say things, or accept things, like this as if they are true? Many of the New Deal programs did not last past 1940. So, **Oakminster** , please specify which programs were difficult to end when the crisis was over, and why it was problematic that they did not. For instance, the WPA ended in 1943. The Civil Works Administration ended in 1934. The FDIC survived, as did the Social Security Act. These have been very successful. Should they have been ended? What’s the problem? ---
**Author:** ![Dick\_Dastardly](https://avatars.discourse-cdn.com/v4/letter/d/c4cdca/32.png) [@Dick\_Dastardly](https://boards.straightdope.com/u/Dick_Dastardly)\ **Post date:** [June 3, 2010, 4:09pm UTC](https://boards.straightdope.com/t/the-new-deal-didnt-end-the-great-depression-wwii-did/541701/53 "2010-06-03T16:09:57Z")
> [@Tom\_Tildrum](#): > > But domestic firms were able to thrive on that domestic demand because they lacked foreign competition. Look at how the US car industry boomed after WWII and eroded after German and Japanese competition resumed. > > It’s not correct to say that WWII ended the Depression. The devastation of WWII ended the Depression – here. The standard conservative line about this period is that it was an export-led boom rather than fiscal stimulus which grew the economy but that is complete rubbish. The US didn’t have foreign competition for US demand before WW2 to any great degree. And any foreign company operating in the US would employ US people, pay US taxes and raise US GDP. Every economist will tell you foreign trade grows economys faster than no trade so despite the absence of big trading partners for decades after WW2 America’s economy grew very nicely. It’s bleedingly obvious that government spending on WW2 ended the Depression. ---
**Author:** ![Dick\_Dastardly](https://avatars.discourse-cdn.com/v4/letter/d/c4cdca/32.png) [@Dick\_Dastardly](https://boards.straightdope.com/u/Dick_Dastardly)\ **Post date:** [June 3, 2010, 4:11pm UTC](https://boards.straightdope.com/t/the-new-deal-didnt-end-the-great-depression-wwii-did/541701/54 "2010-06-03T16:11:02Z")
> [@Hentor\_the\_Barbarian](#): > > What, am I invisible? No wonder I have to repeat the same shit over and over in these threads. Sorry I clicked the link but didn’t scroll the whole way down. 🙂 ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [June 3, 2010, 4:11pm UTC](https://boards.straightdope.com/t/the-new-deal-didnt-end-the-great-depression-wwii-did/541701/55 "2010-06-03T16:11:26Z")
> [@ralph124c](#): > > One thing that hasn’t been discussed-the reason why the world did NOT relapse into depression, after the end of WWII. It was that the USA needed to build/repair an infrastructure that had decayed for the past 16 years. Don’t forget that a _huge_ part of the economic outlook is _confidence_. At the end of W.W. II, Americans were confident and ready to spend. And by the way (hidden since it’s off-topic): Because confidence is key, a Presidential duty is to pretend economic optimism whether he believes it or not. This was one reason I quickly became disillusioned with GWB in January 2001. Immediately after election, he started forecasting recession, just to ensure Clinton got the blame. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [June 3, 2010, 4:13pm UTC](https://boards.straightdope.com/t/the-new-deal-didnt-end-the-great-depression-wwii-did/541701/56 "2010-06-03T16:13:09Z")
> [@ralph124c](#): > > One thing that hasn’t been discussed-the reason why the world did NOT relapse into depression, after the end of WWII. It was that the USA needed to build/repair an infrastructure that had decayed for the past 16 years. Cite that there was an infrastructure problem? From 1941 - 1945 certainly, but the New Deal built lots of stuff as part of the stimulus. As has already been mentioned, Americans could not buy big ticket items for four years, and had lots of money saved, so there was a big market for the goods produced as factories shifted back to consumer items. Over 40 years ago there was a TV series where HST was interviewed - I think the book of it was called Plain Speaking. I remember one episode where Truman specifically mentions the steps taken to deal with the expected post-War recession. He personally suffered in the post-WW I recession when he returned from Europe, so he was very sensitive to the problem. ---
**Author:** ![TriPolar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tripolar/32/3008_2.png) [@TriPolar](https://boards.straightdope.com/u/TriPolar)\ **Post date:** [June 3, 2010, 4:18pm UTC](https://boards.straightdope.com/t/the-new-deal-didnt-end-the-great-depression-wwii-did/541701/57 "2010-06-03T16:18:36Z")
> [@jk1245](#): > > Would conservatives (I mean traditional fiscal conservatives, not the lunatic fringe that seems in vogue today) be OK with temporary New Deal style deficit spending? New Deal deniers are the traditional fiscal conservatives. They insisted the New Deal wouldn’t work before it was implemented, after it was implemented, after the start of WWII, and continuing until today. ‘Fiscal conservatism’ and ‘fiscal liberalism’ and all the other ‘fiscal isms’ are in conflict with the concept of making rational decisions based on the actual circumstances. What we are talking about is the government system of maintaining ‘money’ as a substitute for the actual value of things. Most of the laws and government actions related to the economy are an attempt to artificially alter that value. Government actions can be detrimental or benificial as a result, but it isn’t due to the ‘ism’ used as a justification. The New Deal was clearly beneficial at the time. The same program used in some future ‘Greater Depression’ may fail. ---
**Author:** ![StusBlues](https://avatars.discourse-cdn.com/v4/letter/s/dc4da7/32.png) [@StusBlues](https://boards.straightdope.com/u/StusBlues)\ **Post date:** [June 3, 2010, 5:51pm UTC](https://boards.straightdope.com/t/the-new-deal-didnt-end-the-great-depression-wwii-did/541701/58 "2010-06-03T17:51:12Z")
> [@Dick\_Dastardly](#): > > A nice chart : > > [http://farm5.static.flickr.com/4058/4666037681\_9123afcd4d.jpg](http://farm5.static.flickr.com/4058/4666037681_9123afcd4d.jpg) What does the y-axis represent here? ---
**Author:** ![Hentor\_the\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/h/8edcca/32.png) [@Hentor\_the\_Barbarian](https://boards.straightdope.com/u/Hentor_the_Barbarian)\ **Post date:** [June 3, 2010, 6:09pm UTC](https://boards.straightdope.com/t/the-new-deal-didnt-end-the-great-depression-wwii-did/541701/59 "2010-06-03T18:09:21Z")
> [@StusBlues](#): > > What does the y-axis represent here? Ahem… > [@](#): > > (The Y-Axis is GDP expressed as a percentage increase over the lowest GDP in 1933. Note that in 1929, the GDP is nearly 40% ABOVE the 1933 low, and this was surpassed in 1936) If people would bother to read what I post! 🙂 ---
**Author:** ![StusBlues](https://avatars.discourse-cdn.com/v4/letter/s/dc4da7/32.png) [@StusBlues](https://boards.straightdope.com/u/StusBlues)\ **Post date:** [June 3, 2010, 7:42pm UTC](https://boards.straightdope.com/t/the-new-deal-didnt-end-the-great-depression-wwii-did/541701/60 "2010-06-03T19:42:38Z")
> [@Hentor\_the\_Barbarian](#): > > Ahem… > > If people would bother to read what I post! > > 🙂 Sorry, mate, didn’t read your entire article, just \*\*Dick’s \*\*pic. Not sure what that says about me. [Previous page](https://boards.straightdope.com/t/the-new-deal-didnt-end-the-great-depression-wwii-did/541701.md?page=2) [Next page](https://boards.straightdope.com/t/the-new-deal-didnt-end-the-great-depression-wwii-did/541701.md?page=4)