regent
Gold Member
- Jan 30, 2012
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" the real economic lesson to come out of the World War II era was not that the conscription of nearly a fifth of the labor force into grueling and dangerous working conditions abroad and the imposition of a command economy at home — complete with rationing, price controls, and government allocation of many aspects of life — could bring unemployment down. Soviet-style command economies had many problems, but unemployment was not typically one of them.
Instead, the true lesson from the period can be ascertained from the events of 1945-1947 when the largest economic “stimulus” in American history was dramatically and quickly unwound, months before most people anticipated it (because the atomic bomb brought a sudden unexpected end to the war). No other episode more clearly supports the notion that the best economic stimulus is for the government to get out of the way."
Policy Report: Stimulus by Spending Cuts: Lessons from 1946
By the end of the war people had money. The money was from government spending during the war. With the war over and products now available people spent their war-time and demobilization money.
The bomb had little to do with the economy but a great deal to do with the end of the war, and people wanting to get on to a peacetime life. Any idea of how much money the government put into that wartime economy?