by Victor Davis Hanson<\/p>\n
National Review Online<\/em><\/p>\n Since 2009, the example of the economic boom following World War II has been used by Keynesians to justify their record \u201cpeacetime\u201d levels of borrowing intended to lift the US out of the doldrums. Indeed, the more the contemporary borrowing fails, the more the vast indebtedness of the war years is invoked to reassure us. On occasion a wry lament follows that if only a spaceship full of dangerous aliens were to appear, we might have the requisite excuse to follow our grandfathers into a new collective frenzy of economic stimulus and public debt.<\/p>\n Citing the benefits that accrued from World War II, of course, is ironic for lots of reasons \u2014 aside from the horror of 50 million dead. Modern liberalism has argued that defense spending, in all its manifestations, is\u00a0ipso facto<\/em>\u00a0an uneconomical use of national resources. Money spent building an artillery gun and training a youth to fire it supposedly could be better spent subsidizing higher education or producing a hybrid car \u2014 as if the modern college turns out better disciplined, more motivated, and better educated young people than does the Marine Corps or Air Force; as if deterring aggression is more costly than meeting it on the battlefield at a disadvantage; as if the habitual exactness and lasting skills acquired in building a huge fleet carrier are comparable to those required for building a Chevy Volt.<\/p>\n For decades the liberal argument was that the New Deal cured the Depression. But in a new twist, the war has suddenly been reinvented to support the current arguments of the new Keynesians \u2014 despite the irony in the embrace of the old right-wing argument that it was the World War II defense spending, not FDR\u2019s New Deal, that finally got America out of a near-decade-long depression.<\/p>\n In ingenious fashion, the new argument insists that the second downward spiral of 1937\u201338 \u2014 formerly ostensible proof that five years of the New Deal and of anti-business rhetoric had not worked \u2014 should be attributed only to FDR\u2019s lacking the will or political muscle to stay the course and accelerate deficit spending, redistribute more income, and grow far bigger government. Then luckily the war came along. That crisis provided the necessary political landscape, which had been lacking during the supposed Keynesian backsliding of Roosevelt\u2019s second term, to force through the long-awaited New New Deal. At last, the really big scare allowed the really big borrowing, and the result was the really big prosperity for the next half-century.<\/p>\n But as many have pointed out, there are all sorts of problems with this account. During World War II, the American public scrimped and saved. If household income increased, so did household savings \u2014 not surprisingly, given the rationing of many consumer goods and total unavailability of others. Washers, dryers, hot-water heaters, vacuum cleaners \u2014 all those and more were bought for the first time after the war, and often without borrowing.<\/p>\n In other words, there was plenty of private postwar investment capital and household money waiting to be tapped when the shooting stopped and millions came home \u2014 especially for basics such as new cars, trucks, tractors, and appliances.<\/p>\n But now? Household credit-card and mortgage debt, for all the new frugality, remain high. Consumers are strapped, even those who have jobs and have not lost thousands in collapsed home equity and depleted 401(k) retirement plans, or made nothing in years from near-zero-interest savings accounts. In other words, we do not have a long-deprived public, flush with years of hoarded cash, just waiting with pent-up demand to buy brand new labor-saving devices and shiny new vehicles produced in converted tank and bomber factories. There is no need to add that in a pre-Great Society America, without food stamps, two to three years of unemployment insurance, and housing subsidies, there might have been more incentive to hustle for jobs.<\/p>\n Moreover, the world abroad in 1946 was hardly similar to the world in 2011. Review the prior status of our present global competitors: India was a backward colony and in civil turmoil. War-torn China was about to embark on the most self-destructive social experiment in human history. Two-thirds of a centrally planned Soviet Union was in shambles. Western Europe was near starving after years of bombing and Nazi strangulation. The future export powerhouses of Japan and Germany were in ruins. Brazil was pre-modern. The miracles of Hong Kong, Singapore, Taiwan, and South Korea were still imaginary. A victorious Britain was full of self-doubt and exhausted, busy dismantling its colonial empire and nationalizing its steel, transportation, health, and energy industries.<\/p>\n In the immediate postwar years, only a capitalist, self-confident America was poised to supply foreigners with much-needed manufactured goods, expertise, and capital to raise the world from ruin. And from the profits, we were able to pay down our own staggering and unsupportable wartime-incurred debt. Note as well that in 1946 a self-sufficient oil-producing America was not guzzling down a half-trillion dollars\u2019 worth of imported oil each year.<\/p>\n In short, in 2011 there is nothing that suggests the present massive borrowing will lead us to anything like the prosperity of the postwar years \u2014 a time when social spending and entitlements accounted for 30 percent, not 70 percent of the annual federal budget; when households both had cash and were eager to buy long-denied items; when America did not import high-cost oil (having recently supplied 80 percent of its wartime allies\u2019 oil needs from domestic production); and when an unscathed industrial-powerhouse United States was alone on top of the world.<\/p>\n But if we must go back to the post-World War II era for an example to enlighten us about what the current Obama policies presage, then the similarities to the present are not to be found in 1940s America. A better guide is Clement Attlee\u2019s 1946 United Kingdom, which, like Obama\u2019s 2011 America, sought to retrench from the world scene, lead from behind, and establish a much-vaunted high-tax, big-government, cradle-to-grave redistributive welfare state \u2014 one whose legacy we have just witnessed in London\u2019s streets.<\/p>\n \u00a92011 Victor Davis Hanson<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" by Victor Davis Hanson National Review Online Since 2009, the example of the economic boom following World War II has been used by Keynesians to justify their record \u201cpeacetime\u201d levels of borrowing intended to lift the US out of the doldrums.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_newsletter_tier_id":0,"footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[49,619,307],"tags":[667,417,42,465,149,323,50,489,668,1068],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p466Sb-CQ","jetpack_likes_enabled":true,"jetpack-related-posts":[{"id":7998,"url":"https:\/\/victorhanson.com\/wordpress\/comparing-the-war-on-terror-with-wwii\/","url_meta":{"origin":2408,"position":0},"title":"Comparing the ‘war on terror’ with WWII","author":"victorhanson","date":"November 10, 2014","format":false,"excerpt":"by Victor Davis Hanson \/\/ World Net Daily Over the years I\u2019ve debated scholars and pundits on issues ranging from illegal immigration (no to open borders), George Bush\u2019s troop levels in Iraq (don\u2019t add and don\u2019t subtract, but change tactics and force the Iraqis to step up), and World War\u2026","rel":"","context":"In "Terrorism"","block_context":{"text":"Terrorism","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/war-on-terror\/"},"img":{"alt_text":"(Pearl Harbor via WND)","src":"https:\/\/i0.wp.com\/victorhanson.com\/wordpress\/wp-content\/uploads\/2014\/11\/PearlHarbor-1-500x279.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":859,"url":"https:\/\/victorhanson.com\/wordpress\/why-do-societies-give-up\/","url_meta":{"origin":2408,"position":1},"title":"Why Do Societies Give Up?","author":"victorhanson","date":"February 21, 2013","format":false,"excerpt":"by Victor Davis Hanson Tribune Media Services Why do once-successful societies ossify and decline? Hundreds of reasons have been adduced for the fall of Rome and the end of the Old Regime in 18th-century France. Reasons run from inflation and excessive spending to resource depletion and enemy invasion, as historians\u2026","rel":"","context":"In "Civilization"","block_context":{"text":"Civilization","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/civilization\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3000,"url":"https:\/\/victorhanson.com\/wordpress\/dont-waste-a-crisis\/","url_meta":{"origin":2408,"position":2},"title":"Don’t Waste a Crisis","author":"victorhanson","date":"January 25, 2009","format":false,"excerpt":"Absorbing as much of the economy as possible. by Victor Davis Hanson Tribune Media Services Euphemism comes from the Greek word\u00a0euphemia, which means \u201cusing the good word\u201d\u2014usually in place of the accurate bad one. Recently we\u2019ve become experts at it. Printing trillions more dollars and growing government to cover new\u2026","rel":"","context":"In "January 2009"","block_context":{"text":"January 2009","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/archives\/2009\/january-2009\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":10798,"url":"https:\/\/victorhanson.com\/wordpress\/q-a-hosted-by-jay-nordlinger-vdhs-wwii\/","url_meta":{"origin":2408,"position":3},"title":"Q & A, Hosted by Jay Nordlinger: VDH\u2019s WWII","author":"victorhanson","date":"December 7, 2017","format":false,"excerpt":"Listen to Victor Davis Hanson chat about his new book with Jay Nordlinger on his podcast, Q & A. Victor Davis Hanson\u2019s new book is \u201cThe Second World Wars: How the First Global Conflict Was Fought and Won.\u201d Jay asks him a slew of questions, including: What caused the war?\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":115,"url":"https:\/\/victorhanson.com\/wordpress\/when-big-deficits-became-good\/","url_meta":{"origin":2408,"position":4},"title":"When Big Deficits Became Good","author":"victorhanson","date":"January 16, 2013","format":false,"excerpt":"by Victor Davis Hanson Tribune Media Services As a senator and presidential candidate, Barack Obama said that he detested budget deficits. In 2006, when the aggregate national debt was almost $8 trillion less than today, he blasted George W. 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