Well if you look at the whole thing logically, it was Hitler that got us fully out of the depression. If you want to be technical though, going off the gold standard and beginning massive deficit spending in 1937 is what did it... which was nice at the time but is what has us in the mess we are in now.
What got us out of the Great Depression?
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jon_perez
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Currency devaluation and reinflation?
That seems to be the conventional wisdom. I'd like to hear the Austrian theory explanation of what got the US economy out of the Great Depression. AT seems to be short on explanations for this, whereas even the different schools of mainstream economics are pretty much in agreement.
If there was a free market in the 1950's then doesn't that mean that any companies that did poorly was because of capitalism?
Or does that mean that the company was bad in general and it wouldn't have survived anyways?
Similary, if there is a company doing well now and there is no free market than doesn't that mean it is doing well in spite of the presents of regulations?
Sorry to usurp this thread for non "Great Depression" reasans(sp) but it is tangently related.
Or does that mean that the company was bad in general and it wouldn't have survived anyways?
Similary, if there is a company doing well now and there is no free market than doesn't that mean it is doing well in spite of the presents of regulations?
Sorry to usurp this thread for non "Great Depression" reasans(sp) but it is tangently related.
hugolp
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There is plenty of literature about it from an austrian perspective.
gonegolfin
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No it is not. The US Dollar would not have been the reserve currency without the majority stake in Gold. Period.
Brian
hugolp
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Its true, but having the strongest military had a lot to do as well. Having a lot of gold and not having a strong military would not have made the dollar the world reserve currency.
Matt Collins
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Austrian economics doesn't deal with solutions. It deals in trends and effects long term. It would tell you that the "New Deal" just made people think we were getting out when in reality it was a simple inflation and deficit spending cycle that was due to crash again.
axiomata
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Robert Higgs has the best answer to your question. He is the source that Murphy uses in the Politically Incorrect Guide linked above.
Regime Uncertainty: Why the Great Depression Lasted So Long and Why Prosperity Resumed after the War
By Robert Higgs
ABSTRACT: Evidence from public opinion polls and corporate bond markets shows that FDR’s policies prevented a robust recovery of long-term private investment by significantly reducing investors’ confidence in the durability of private property rights. Not until the New Deal/war economy ended and resources became available for peacetime production did private investment—and the nation’s economic health—fully recover.
You can download the whole pdf here.
Regime Uncertainty: Why the Great Depression Lasted So Long and Why Prosperity Resumed after the War
By Robert Higgs
ABSTRACT: Evidence from public opinion polls and corporate bond markets shows that FDR’s policies prevented a robust recovery of long-term private investment by significantly reducing investors’ confidence in the durability of private property rights. Not until the New Deal/war economy ended and resources became available for peacetime production did private investment—and the nation’s economic health—fully recover.
You can download the whole pdf here.
shocker315
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The Depression only ended when savings (the real measure of wealth) increased. Not government spending (GDP). Savings increased because citizens withheld spending and rationed goods and services during WW2. Thus...when they did spend after the government ended the war...they did so out of their own savings rather than going into DEBT through borrowing.
A recession happens when there is too much debt and a lack of funds to repay/service that debt. A recession/depression is natural market forces working to encourage savings, (people spend less, thus savings grow) as explained by Schiff dozens of times. If taxes are cut and government spending reduced, personal savings can grow even more rapidly. The rationing of goods and war bonds of WW2 was essentially a government mandated recession on the citizens.
However these days, governments don't want a recession/depression or rationing to happen. They encourage even more debt financed spending to maintain the boom, thus they make it worse in the long run when that total debt becomes too large once again.
Also, 450,000 deaths in WWII tends to reduce unemployment, and European manufacturing competitors being firebombed to rubble has obvious side benefits for the US economy.....but of course at a substantial cost to human lives.
A recession happens when there is too much debt and a lack of funds to repay/service that debt. A recession/depression is natural market forces working to encourage savings, (people spend less, thus savings grow) as explained by Schiff dozens of times. If taxes are cut and government spending reduced, personal savings can grow even more rapidly. The rationing of goods and war bonds of WW2 was essentially a government mandated recession on the citizens.
However these days, governments don't want a recession/depression or rationing to happen. They encourage even more debt financed spending to maintain the boom, thus they make it worse in the long run when that total debt becomes too large once again.
Also, 450,000 deaths in WWII tends to reduce unemployment, and European manufacturing competitors being firebombed to rubble has obvious side benefits for the US economy.....but of course at a substantial cost to human lives.
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