Posted 9 months ago on Aug. 8, 2012, 12:16 a.m. EST by SteveKJR
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This article was written by Forbs 08/06/2012 - Here are some exerpts and the link is below. This article covers spending that goes back to the Great Depression.
Similar was the result of a 2011 study from the Phoenix Center for Advanced Legal & Economic Public Policy Studies.
The four authors found: “government spending has zero effect on private-sector job creation. This result is consistent with the apparent impotence of huge federal government spending increases in recent times aimed at reducing unemployment.”
Moreover, contrary to myth, World War II did not end the Depression. As economist Robert Higgs has well-documented, war-time prosperity was an illusion, with non-government GDP growth slowing.
“During the war years the economy operated essentially as a command economy,” he wrote, with few “normal measures of macroeconomic performance.” After all, the government conscripted 16 million men into uniform and directed much of America’s economic activity into war production.
There was little change in total national wealth. Arthur Herman, a visiting scholar at the American Enterprise Institute, pointed out that “Even with rising wages, they had to put up with rationing and very limited choice in consumer goods.”
Ironically, it was the end of this wartime “stimulus spending”—which Herman figured at $3 trillion in today’s dollars—which led to economic growth. At the time people feared that Washington slashing arms production and demobilizing military personnel would lead to another depression.
However, he observed, “private investment came roaring back, triggering steady economic growth that pushed the U.S. into a new ear, as the most prosperous society in history.” Added Herman, “the biggest trigger to growth turns out to have been a sharp rise in private capital investment, which the New Deal had slowed.”
Here is the link 08/06/2012