War does not create prosperity

[Blackhawk2001]

I'm not discounting in terms of "this didn't matter", because obviously it did. Folks with savings have the ability to do things that folks lacking savings do not.

I'm discounting relative to the effect of government shrinkage because I think it was probably several orders of magnitude more important.

When you say "several orders of magnitude" do you mean "100 times more important" as quantified by some statistics, or are you just invoking a turn of phrase?

 

[Fletch]

When you say "several orders of magnitude" do you mean "100 times more important" as quantified by some statistics, or are you just invoking a turn of phrase?

Well, one way to read it is in absolute dollars. Did the private savings unleashed by the end of the war approach the billions of dollars cut out of the government's annual budget, over the long term? I can't remember the number off the top of my head (60 billion?), but even in 1945 - 1948 figures it was pretty astronomical.

I say "I think" it was several orders of magnitude more important because I think it probably was. I don't think folks in the aggregate had the savings to cover that many billions of dollars. I'm perfectly willing to be proven wrong on this count, and I'll post the number Murphy quotes when I get a chance to check the reference, for comparison's sake.

 

[ATOMonkey]

What I find interesting is that even though government spending and size was slashed, taxes still remained relatively high for both business and personal income.

Impediments to business such as price fixing, regulations, and tariffs were removed, which did as much to improve commerce as anything.

 

[Fletch]

What I find interesting is that even though government spending and size was slashed, taxes still remained relatively high for both business and personal income.

Impediments to business such as price fixing, regulations, and tariffs were removed, which did as much to improve commerce as anything.

Yeah, I'm seeing that my initial recollections of the data weren't accurate. GDP stayed the same, government spending shrank by two-thirds (60 billion worth), but was replaced by private spending. Government tax receipts were more or less level. I guess I'm just getting forgetful in my old age.

 

[dross]

As long as you have basic rule of law, low taxes and low government regulation will produce prosperity.