Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
A steady increase from 1938 on, with a real jump in 1941? But, wasn't this due to WWII, war-related defense industries as well?
We were supplying arms to Japan long before Pearl Harbor!
The real jump in the early '40's was centrally planned as our war initiatives were pressed to advance. In a short span of a few years we had to stimulate our businesses and economy centrally in order to essentially double our GDP that quickly. Free markets on their own could never have done this.
There is this myth that interest rates are what it takes to hold onto da guberment securities, meaning when interest rates on a 10 year go to zero some sort of Ragnarök of inflation is supposed to occur because everyone will dump them as being worthless, no return investments (as if cash is never found in a mattress). What it will do is just become a currency.
Along with this myth is the idea that one losing half of one's savings in 10 years means this is a bad investment.
Now consider some global disaster. Think someone who is well to do would be happy to have an iron clad guarantee of half the effective rate today? I think 10 million today and 1 million in equivalent buying power 10 years from now guaranteed is a good investment for a billionaire. Most antediluvians would have been content to have something to float on. Think someone in California might have been interested in having half their water guaranteed?
So this inflection point that must cause more aggregate demand due to a lack of returns is a myth, another one of those economic myths that cause such mayhem in the prevailing theories. Typical mathematical model junk economics with assumptions with no justification.
As others have mentioned by the start of 1940 prior to the war we were recovering at about the same level we have been pulling out of the one we have just been through. Moving up, but slowly..
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.