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WWII ended the depression?

Take this chart from WikiPedia commons:

Wiki-Commons US GDP 1910-1960

U.S. GDP 1910 through 1960

What’s interesting about it is it would seem to put truth to the lie that it wasn’t the New Deal that ended the depression, but World War II.

However if you look at the chart, you’ll see that essentially before WWII started, GDP was back on track – the log curve recovers before our 1942 entrance in the war. That would imply the New Deal did the trick (or, I suppose if you’re really cynical, it recovered by itself).

As I’ve argued elsewhere, even if the war was the source of recovery, it isn’t an argument against stimulus in an economic downturn – in fact quite the opposite. It may be a horrible way to do stimulus, but it (war) still is stimulus (ie: government spending to create demand).

Anyway, it’s an interesting chart but it would probably require other metrics to truly judge whether the recovery from The Depression really was complete before WWII (there are more metrics than just GDP).

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