Obama--the grumblings

Originally Posted by classicman

Stop that.

I have seen on tv and read that there are differing opinions about what got out America out of it. Many seemed to believe the war was the biggest factor. That makes sense. I think its very difficult to quantify the impact otherwise.

US GDP was at about $30 billion in '32 when FDR took office....having dropped from over $40 bill between '29 and '32.

As the New Deal programs were implemented, it rose each year between '33 and '37 to over $45 billion, then dipped in '37, the year FDR cut back on the New Deal spending.

Federal government spending rose each year from about $4 billion in '32 to over $8 billion in 37, then dropped for one year to under $7 billion, when FDR cut back on New Deal spending.

The historical data is available from the US Bureau of Economic Analysis, but you have to search for yourself.

Perhaps the Keynesian model is not the only explanation for the growth of GDP (and the drop of unemployment by half) being tied to the growth in government spending between 1933-1938....economics is not an exact science. I'm not an economist, but it makes sense to me.
It certainly wasnt war spending in those years.

I would suggest the Roosevelt New Deal contributed dramatically to the revival of the moribund economy he inherited (not only preventing further tanking, but providing slow and steady growth and job creation) thus stabilizing the economy and then WW II took it to new heights.