Government Spending Didn’t End the Great Depression
Given that our country is mired in a severe recession, the history of the Great Depression—especially the history of how we got out of it—is rightly regarded as relevant to fixing today’s problems.
Some popular accounts would have us believe that the Great Depression ended via a) FDR’s New Deal and/or b) World War II. Translation: it was ended via a) a veritable government takeover of the economy, including massive wealth transfers to pay for make-work projects and/or b) an extremely costly war, both in money and in lives. Keynesian economists (and the politicians they influence) have used this supposed history to justify claims that more government spending, no matter what form, is the key to economic recovery.
But economic historian Burton Folsom and his wife, Anita Folsom, have written a forceful Wall Street Journal piece debunking the popular mythology of the Great Depression.
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