Of late, I’ve heard countless Republicans, Fox News pundits and others emphatically state that:
- Keynesian stimulus spending has never worked in the past;
- World War II was the sole impetuous for recovery after the Great Depression – not spending; and
- the New Deal had no ameliorating effect on the Great Depression’s high unemployment rates.
All of this is said, of course, in argument against the current Obama/Democratic stimulus package.
It is certainly true that World War II proved to be an enormous, if not THE most important, stimulus to post Depression recovery. The chart* below, however, makes it clear that Roosevelt’s stimulus spending did have an important, positive effect on the U.S. economy:
