WW2 as an economic model.

[BlueStreak]

In recent months there has been a lot of talk about FDRs policies, WW2, the effects of these two things on the economy and how they relate to the current situation.

In the late 1930's defense production began to increase in order to meet the demands of the "Lend/Lease" program. By 1944 defense production reached levels previously unparalleled in human history. In the decades following the second world war, defense production dropped, but only briefly, as weapons had to be produced in order to maintain the arms race, and service the Korean and Vietnam wars.

Now, bear in mind, up until the late 1960s or so, the heavy industries of most of our international competetors, Germany, Japan, France, Italy, etc. layed in ruins.

This period from the late 1930s until the early 1970s or so, was also undeniably the most prosperous periods in American history. We had an economic expansion that was the envy of the world.

Now, I stand back and look at this era, and I can't help but wonder;

1) Could it be said that this model represents "massive government spending"?
And could the same result be acheived through "infrastructure" spending
instead of, or in addition to, defense spending?

IMO, Yes.

2) Could it be said that this model also represents "isolationism"?
Given the fact that our industries had little to no competition during
this era, and our government maintained steep import tariffs, I would have
say; "Yes".

However, with todays model of "Globalization" the game has changed a bit, hasn't it? Isolationism on the level of the 1950s would be far more difficult, if not impossible. But we can build and/or repair infrastructure, we can build schools and repair/expand our highways/railways/airports, etc.

So, maybe this "massive government spending", as scary as it sounds, isn't such a bad thing? So long as we spend the bulk of it domestically, rebuilding our cities, industries, and other things that benefit American citizens, that is.
And, by extension, buying the things that we must from other countries should help lift beleagured economies abroad as well.

Maybe if the current administration spent more time billing the "stimulus" as "investment", there wouldn't be as much uproar as we have today?

Just a thought.

Whadda ya say?

Regards,
Dave