Friday, December 31, 2010

WW2 was all about fiscal policy

  The massive mobilization of men, women and factories was because Nazi Germany and governments around the world were simply printing more money to fund the war effort. As stated before, WW2 ended the great depression starting with Hitler's Germany. The Nazis were printing so much money first for infrastructure and domestic projects that led to a huge decrease in unemployment. When Hitler began to focus on war making, then economy received a further financial boost from the state to mobilize the country towards war.



"The government should pay people to dig holes in the ground and then fill them up." 
                                                                               John Maynard Keynes

   The assumption that WW2 did not end the great depression or unemployment simply because it drafted the unemployed to be shipped overseas misses the entire point. That government stimulus could have been spent on anything. It could have been spent on roads, hospitals, and bridges. As long as it was spent. I am not suggesting that war is necessary to solve an economic crisis, but the massive fiscal stimulus the Nazis initiated was needed. Millions of people died, irreplaceable lives. No different from digging holes to only refill them again. Much like burying the dead. Yes, WW2 ended the great depression, but could you imagine if that energy and money was actually spent on something productive.

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