LaBarnes said:
Yeah, because the two wars we were just in were SOOOO good for our economy. Wait no, that's why we just about had to default the other day... Shut up, Keynesians.
Nice analogical argument....
The differences between the Iraq and Afghanistan wars and WW2 is so striking even a the grader is capable of pointing them, not the least of which is scale. The fact that you blatantly ignore this is proof that you are unwilling to listen to reason so I should just hold my breath here shouldn't I? TOO LATE!
You see, with the I and A wars, we used equipment and soldiers from a peace time stockpile and haven't really had to up-arm or re-arm our soldiers. We have done just fine on using the equipment we already had, hence, none was purchased. We are mostly using ordnance, fuel, salaries.
The bulk of the ammunition we use actually comes from France. I know right? We by almost all out our small arms ammo from Fabrique National. As such, none of that money gets put into the American Economy and can chalked up to trade deficit.
Fuel, well we all know where that comes from, so no explanation needed....trade deficit.
And well, the salaries of soldiers don't really add up to a whole lot... probably less than 1/5th of our military expenditures.
You see, the reason why WW2 bolstered our economy so much was because of a MASSIVE increase in arms procurement that, for over 6 years, completely "maxed out" our available industrial capacity and, once the draft began, created a huge labor shortage, essentially putting everyone back to work and greatly increasing GDP/c(Gross Domestic Product per Capita, this a measurement of mean income, not raw production and is far more accurate at predicting economic conditions the GDP). Because this production cycle and labor shortage lasted so long, and because of the resulting shortages of consumer goods, people built up vast amounts of savings which propped up the economy post-war until the economy could be converted back to being consumer driven, instead of being militaristically driven, preventing a crash. I other words, it maintained spending at a level as such to prevent an economic contraction.
THAT is the problem we are having kick starting the economy. The scale of our efforts has not been nearly great enough to cause a long lasting effect! And, as a result, every time we cut of the stimulus money(however poorly it was allocated[you can't just throw money at the economy and expect it to do something]), GDP/c contracts to it's earlier levels as we have failed to create a infrastructure capable of maintaining the increased spending. THAT is why Mr. Krugman's idea is a good one. However hard it is to pull of, we need something to scare the bejezus out of everyone to get us working towards a common...very expensive goal.