Stimulus?

Stimulus response

This is not as in depth as the UCLA study on FDR's New Deal policies, but the same basic conclusion recurs. Whatever FDR was doing it was relatively unsuccessful. That modern people are still confused into thinking otherwise is a testimony to the popularity of FDR as a President, and the lack of appreciation for federal economic policies that did in fact work.

The first part of the article deals with public works and social welfare programs, both of which FDR instituted in large numbers. Those same social welfare programs, now expanded into other arenas, are basically the reason that using large public works programs wouldn't have much impact on our economy in real terms. Instead of needing even a "crappy" job building a dam or road, people can instead take unemployment insurance, go (back) to school, and get a better job. In theory. If the evidence is mixed even with massive unemployment that government spending in this area still created crowding effects, I would be rather concerned as far as creating any growth by a similar program to re-build our infrastructure with our more modest levels of unemployment, as was sometimes claimed on the campaigns. The importance is generally that we haven't usually rebuilt our infrastructure since the New Deal or even during the 20th century in some places, not that we could use that as a position to grow our economy out of recession. I don't see a major problem contracting to re-lay sewage or water lines or build new alternative energy power sources, but it's clearly not going to fund growth in the economy by itself.

The more interesting part to me was the second part. Keynesian economics basically demonstrates that a war is a vast government outlay of money, and Keynes writings on the economic consequences of peace essentially predicted a powerful recession. This was in part based on the effects of price controls and the deflation occurring from pre-war levels of monetary value, which obviously didn't apply to Great Depression "value". Keynes also apparently didn't quite understand the value of personal savings and the demand for personal consumption that goes quite starved during a time of privation such as a major patriotic war where everyone must sacrifice to win. We on the other hand are in a global (currently two front) war, without a clear victory (I would argue no clear victory possible in combat terms) and without a population that either is accustomed to sacrificing or that is being required to. As a result, the economic impact of peace might be quite different, and again, quite useful. Suppose that soldiers deployed to the front come home to military bases in the states or resume their normal day jobs from National Guard duty, couldn't that inject money back into local economies? I have no statistics however on the savings rates of military families, and it could be quite possible that deprived of combat pay, some would in fact regress. But it seems worth a thought that the public money spent on combat deployments would be resupplied elsewhere (infrastructure?), but the private money currently spent by those deployed combat troops would be spent here.