We’re told by the political-media establishment that President Obama’s massive spending and debt increases, while not creating the millions of new jobs that were promised, did prevent even more job losses.
We’re told that spending cuts now would hurt the “fragile recovery,” driving unemployment even higher.
To pay for World War II, government spending had exploded from $9 billion to $91 billion from 1941 to 1945. Several million young men became soldiers, sailors and Marines. Millions of civilians were employed manufacturing guns, tanks, ships, aircraft, uniforms, boots, etc.
When the war was over in 1945 the government immediately ceased buying war material and quickly discharged millions from military service. Federal spending dropped 68% in three years.
A 68% spending cut today would transform the looming $1.5 trillion deficit into a trillion dollar surplus!
If today’s political-media “economists” had been there in 1945 they would have warned that any spending cuts would spell disaster for the economy, that unemployment would skyrocket. They would have been wrong.
The number of jobs increased by 21% over the same three years. Never before or since have workers enjoyed such a sudden increase in demand for their services.
A 21% increase in jobs today would not only replace the 7.7 million jobs lost since the beginning of 2008, it would create an additional 15 million new jobs! Today’s chronic unemployment would turn into a labor shortage. Jobs would go begging.
Progressives like President Obama and the Democrats in Congress love Keynesian economic theory because it helps them justify what they want to do anyway, expand government. But our actual experience doesn’t validate Keynes’ notion that government, by gobbling up an ever larger share of GDP, and wielding ever more control over the private sector, can create jobs and prosperity.