Last night I appeared on RT to discuss the Senate’s job bill, which was voted down on Wednesday, but will likely resurface in some other form. (Concluding notes below the video.)
Note: at the end of the interview, Thom mentions that after World War II the economy recovered despite massive debts run up during the war. He seemed to suggest this as evidence that debt doesn’t matter. However, what he failed to point out was that the Truman administration was terrified of the post-war economy because of the wave of soldiers that would be returning home. The fear was that they would have no jobs and would crush any social safety nets established. Congress disagreed and rejected the types of legislation that is being asked for now. There wasn’t a ramp up in unemployment money or an extension of benefits. Soldiers weren’t put on government payrolls, as is now being done through a radical expansion of government jobs crowding out the private sector. instead, as Thom said, the soldiers came bank and the economy simply grew. On free market terms. People found work, were creative, were innovative, and moved the economy forward.
Unfortunately in the 1950s more Keynesian thinking began to take hold and pushed us towards bad economic policy in the 60s, that led to Stagflation, and, well, I guess that’s all for another blog post.