Economics: Depression, War, and Cold War - Challenging the Myths of Conflict and Prosperity - by Robert Higgs
*President Franklin D. Roosevelt’s New Deal did not end the Great Depression—it prolonged it. By shaking investors’ confidence in the security of their private property rights, the president’s laws and regulations discouraged the long-term private investment needed to revive the economy. Private investment remained low during World War II and only began to rise—for the first time since the 1920s—after the transition to a new administration in 1945. **The belief that World War II created prosperity is a historical myth that stems from the misinterpretation that war or large defense spending benefits the civilian economy. The draft might have reduced official unemployment numbers, but military service yielded little pay under harsh conditions and cannot be reasonably equated with jobs in the civilian sector. Moreover, few durable and non-defense capital goods were produced by the new labor force, and real personal consumption, adjusted for population growth, changed very little between 1941 and 1944.
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