> Wars are often very bad for the economy. Vietnam was a huge expenditure, but the U.S. economy in the '70s was hardly a thing we want to go back to. The first Bush spent a lot of money in Panama and Iraq, but he got booted out of office because the economy was a slump. The reason is simply that we no longer need a bunch of money pumped into our industrial sector (despite those who are struggling vainly against the march of globalization, America is not going to be an industrial nation in the future).
>
> Stephen


It was argued in my macroeconomics class this semester that wars are never, EVER good for economies. Wars involve the consumption and destruction of capital...such as in the use of production to create goods that are destroyed, or in total war, where the means of production themselves are destroyed. There's also the problem where the state is overtaking segments of the economy...and the state hasn't a clue how to effectively dictate a complex economy.

re: The New Deal. The Great Depression was actually two massive recessions surrounding a slight recovery. From...I think it was 34-37, the stock market (the primary indicator of investor confidence in future production) was moving upwards, as were production levels and whatnot. The second recession/stock market crash "coincided" prefectly with the aftereffects of FDR's attempts at packing the Supreme Court, which had previously acquired the nasty habit of striking down New Deal legislation. FDR had the effect of "scaring" the Court, causing one Justice to switch his vote on a momentous case, in effect changing the ideological balance on the Court, allowing New Deal legislation to move through. And the economy tanked. A real recovery was not underway again until 1945.

TOM