[BigM555]

What's really sad is that the entire bible belt is nodding in agreement.

[Nerina]

Originally Posted by cadenhead

This may have been true during WWI and II.

In a world with global economies and outsourcing, I fail to see how this is could be true in any way.

[Jongpil Yun]

Well, it worked in WWII (not sure about WWI) because there was a huge slack in demand, massive stagnation in the economy, hoarding behavior, massive unemployment, deflation, etc. FDR's public works programs and them, eventually, WWII, gave demand a huge kick in the ass which essentially got the gears of the economy turning again. Around the same time John Maynard Keynes in the UK was espousing a similar policy (which would later grow into Demand Side Economics as we know it), which is to say, Government driven demand, funded by borrowing, invested into public goods (though war works to a lesser extent) has huge benefits to the economy (especially in the worst stagnant period in the modern age) due in large part to the multiplier effect, and that countercyclical spending helps even out the business cycle.

The '30s really were a special case, though, and a case which can't be reached without serious, fundamental problems in financial policy, which we unfortunately have now.