After reviewing the time line – check out how GDP soars as deficit spending soars. The Government is putting people to work, first in the WPA then in WWII – notice how as Roosevelt tries to bring deficit spending under control to quickly in 37 a mild recession ensues.

The offhand observations in Morgenthau’s diary are not consistent with the reality of how the New Deal pulled the country out of the depression. From 1933 to 37 unemployment declined year after year, only moving upward as the President moved to quickly toward balancing the budget.

Did you check it out? What are your thoughts. Is Morgenthau really right? Do any of his claims hold water at all?

Yup, that about sums up all of PJ’s assesments. The left-wing idiots of today, know better than the actual achitechs of the past.

oh, and I suppose you had a conversation with Mr. Reich, sense you are “well aware”…

I envy you PJ…Ignorance is bliss!

Mr. Reich is well aware of Mr. Morgenthau bogus claims, and has addressed them, (I am sure you can check it out yourself) as have many other economists and historians.

In the work/wealth cycle, it is work that creates wealth NOT the other way around. Certainly wealth can provide opportunities for more work, which can them create more wealth, but it is the WORK that is fundamental to wealth creation.

Consider your WWI and WWII examples for a moment. Why did GDP grow rapidly during the wars? It is because people were WORKING and the government was spending TONS of money that we did not have. (creating a huge debt). During those time periods we created a huge amount of goods that had little or no value after the war (already fired bullets, exploded bombs have no real economic value). Contrast that to the WPA. The US Government borrowed money to put people to work. They made – Bridges, Tunnels, Schools, Parks, Monuments, Shelters, and other Public Buildings that we still use today. The WPA had an enormous positive effect on the economy and on our society, despite the protestations of Mr. Morgenthau. FDR’s big error was attempting to reign in the debt too soon. Ronald Reagan also used huge deficit spending to pull us out of a recession in the 80s. (yes Saint Reagan did that can you believe it!) George W. Bush and his Republican controlled congress engaged in HUGE deficit spending to pull us out of a recession in 2001, and then continued to spend like drunken sailors when it was no longer needed, while cutting taxes and running up an ENORMOUS debt.

During the time that Reich was in Clinton’s cabinet – hmm lets see, unemployment declined to its lowest post WWII level ever, GDP soared WITHOUT artificial deficit spending, the deficit was reduced to below zero (we had a budget surplus). I am going to conclude that Reich knows what he is talking about here.