WW II was, in fact, what got us out of the Great Depression.
Recall that the war was going on for over two years before we got involved.
And, from 1939 forward, Britain and France were buying large quantitities of U.S. armaments -- artillery, trucks, tanks, airplanes, etc. Lend-lease was enacted in January, 1941, whereby the U.S. government started buying armaments and "leasing" them to the UK. After Barbarossa and before Pearl Harbor, we were also started shipping large quantities of armaments to the USSR.
The result was hundreds of thousands of manufacturing jobs and millions of support jobs. Real jobs in the private sector. Not the temporary jobs created by the WPA and the CCC.
The thing to takeaway from the history of the post-depression era is that a.) it took somebody else getting involved in a war, which b.) created jobs in our private sector.
It doesn't have to be a war. Anything that stimulates activity in the private sector will serve. Like drilling for oil and gas, offshore and onshore and on public lands. Like opening mines, instead of closing them. Allowing timber to be harvested from public lands. Allowing the auto industry to manufacture automobiles that people want and can be manufactured efficiently.
The list goes on and on. But one thing is clear: if the federal government were to end their regulatory regime and start encouraging business rather than threatening it, the effect would be akin to a world war.
Here is the writer’s own view of what got us out of the depression:
On the surface, wartime spending finally propelled America from the Depression’s pits. As war production expanded from roughly 2% of GDP to almost 40%, statistically, America rebounded. In 1940 dollars, GDP shot from $101.4 billion to $120.7 billion in 1941 up to $174.8 billion by 1945 while unemployment fell below 2%.
America didn’t officially enter the fray until December 1941. FDR had by then rescinded most New Deal regulations, scuttled the WPA and similar agencies and ceased his incessant public bickering with private business. Some surmise he stopped attacking industry recognizing he needed their help attacking fascism.
The pre Pearl Harbor boost stems from three factors: wartime spending by others, which does not reflect stimulus on Washington’s part; Lend-Lease, but giving away munitions abroad promotes no prosperity here, and the demise of the New Deal.
After netting out federal spending, GDP surged 17% from $91.9 billion in 1940 to $107.7 billion in 1941. Once engaged, our non-federal output trickled down to $101.4 billion by WWII’s conclusion in 1945.
The private economy reflected little improvement, partly because private consumption was curbed. Living standards didn’t regain 1929 levels until America restored a market based economy in the aftermath of victory.
The president proposed a “Bill of Economic Rights” predicated on aggregate demand maintenance. Congress thankfully repudiated it. Tax rates were slashed while war time rationing, price controls and regulations receded.
America was one of few industrial nations with its productive infrastructure intact. Despite federal spending falling from $93 billion in 1945 to under $30 billion by 1948 (in 1945 dollars), unemployment stabilized around 4% as Americans, free of New Deal shackles, launched an economic boom.
How does blowing up Germany boost American living standards? How is making men sleep in frigid fox holes under enemy fire enriching? How did rationing everything from the enjoyment of luxuries to our clothing and diets lift anyone’s material standing?
The military doesn’t jumpstart the economy, it protects producers. This represents patriotic sacrifice, not prosperity.
Production is the progenitor of wealth, but making things unvalued by markets doesn’t improve life. Neither does working harder to achieve the same result. Repairing damage caused by war or natural calamity through debt encumbrance does nothing to support sustainable growth. Once said project completes, we’re back where we started with debts to boot.