WWII got us out of the Depression in the sense that the Axis threat gave FDR the power to directly force factories to hire people and step up production, to get people into the workforce and trained for trades via the military, to run big government deficits to raise cash, etc
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But it's a massive failure of our politics that we can only do that kind of thing when we're frightened for our lives Big picture, all of that economic power used to blow shit up and burn down buildings was wasted Every person killed was an economic loss
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If you look at WWII through a global lens it was a massive loss of wealth for the world It's just that it also *moved* wealth from the homeowner whose window was broken (the charnel houses of Europe) to the glazier paid to fix it (the US) so we perceived it as positive
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Eisenhower was acutely aware of this, and as our postwar president gave his famous speech about how the "military-industrial complex" robs the rest of the world Small picture, yes, defense moves government spending and creates jobs, but big picture that money is all wasted
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We could be doing literally anything else with the money that went into those jobs to actually make people's lives better overall, we could be using those people's time and talent and labor to build things that feed people or clothe them or house them or entertain them
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The idea that the only way the government can "create jobs" is the war machine is messed up and will constantly ratchet us closer to our own destruction
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Anyway from the econ side of it this is why the ideal form of "stimulus" is just giving money to poor people who will buy things they need with it If that's politically unviable and you must give them jobs, the jobs should be stuff they either want to do or obviously needs doing
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I think quantitative easing but give the money to the poor would have been a much better plan for giving away unearned money.
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The problem is we're so averse to "just giving away money" that even when everyone knows it's the right thing to do you have to sneak it in You have to make up some kind of job that needs doing or you have to use the monetary system to sneak it into the economy through the banks
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I'm still not clear on where exactly the money from QE actually appears "in the system." As interest on bank deposits at the Fed?
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QE specifically refers to the bank directly buying bonds to put cash into the system when interest rates are already near the floor (normally monetary stimulus means cutting interest rates to encourage people to borrow money)
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Replying to @arthur_affect @BootlegGirl and
Am I correct in thinking QE is focused on the velocity of money part of the overall monetary supply? So M3(?)
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