Whenever I’m at a loss for blog material, I can just check out the latest Krugman column. This Sunday’s pleasure was entitled “1938 in 2010,” and I’ll just quote the silliest bit:
From an economic point of view World War II was, above all, a burst of deficit-financed government spending, on a scale that would never have been approved otherwise… But guess what? Deficit spending created an economic boom — and the boom laid the foundation for long-run prosperity.
But the GDP figures during World War II were essentially made up, being based substantially on administratively determined “prices.” It turns out that Americans’ living standards were at best flat during the war (and that’s not counting the soldiers, of course). Someone, please let Dr. Krugman know about Robert Higgs’ research (here and here).
UPDATE: The myth of World War 2’s economic benefits is of course bipartisan, as evidenced in today’s vituperative post on rightist site Redstate.com.