That fiscal boost

So, I think it\’s generally agreed (whether rightly or wrongly) that massive defence spending is what brought the US out of the Depression.

We\’re told here that we risk a Depression unless we provide a similar fiscal boost. So, what does the Government do?

The Armed Forces yesterday became the first significant victims of government attempts to reduce spending in the face of the advancing recession.

Two programmes worth £20 billion will be cut and delayed after defence chiefs were told that there was not enough money to go ahead as planned.

The announcement throws into disarray the Army’s £16 billion update to armoured vehicles, while the Royal Navy’s £3.9 billion project for two new 65,000-tonne aircraft carriers is postponed for two years.


12 thoughts on “That fiscal boost”

  1. the abyss is approaching…
    now the question is:
    did defence spending push us faster to the big dip or slow the bus down..??

  2. Until about 1940 it wasn’t ‘defense spending’; it was munitions sales to Europe that brought the USA out of the Depression.

  3. FRES has come up a lot on EU Ref, and Richard North makes a compelling case that the whole project will be a complete waste of money, with vehicles totally unsuitable for the actual military climate. It being kicked into the long grass is probably not a bad thing.

  4. So the answer to all is declare war on somebody. It will also solve the ‘youf’ problem. Social workers can be drafted into the military. The sisterhood will shut up. Immigration will be really controlled.
    What are you waiting for?

  5. I never forgot reading an interview with Herman Kahn (military strategist with the Rand Corporation, and author) in the late 70’s / early 80’s in which he opined that the answer to all Britain’s problems, economic and social, was to find itself “surrounded by 200 million hostile Arabs.”

    Had he gone for a religious classification rather than an ethnic one he would have been quite close, but we opened the door and let most of them in, anyway. Difficult to declare war when – putting it delicately in WW2 terms – you’ve already welcomed the Wehrmacht in, made them a nice cup of tea, translated your entire country into German for their convenience, agonised over providing German schools for the Hitlerjugend, seen Cabinet Ministers appoint “personal advisers” from the ranks of the most politically ambitious, and watched approvingly while the rest get their beach towels out on the local sun loungers.

    Good point, though, Mr Cramer 😉

  6. If I remembers correctly the Great Depression started in 1933. The US didn’t start spending big on defence until 1939 or 1940.

    And if I remember my reading correctly one of the reasons British tank development and production was so bad at the start of the war was because the companies that could build tanks weren’t actually interested; their books were full of orders for things like railway rolling stock, trucks, buses etc. I think the same was the case in the US.

  7. btw That’s not to say that the cuts as reported are a good thing; I happen to think they are not. There are plenty of other areas of government spending where similar or bigger cuts could be made that would either do no harm or actually improve matters. Sadly that would involve upsetting NuLabour’s base.

  8. Matthew: The stock market crashed in 1929. The Depression really got started about a year later. FDR was elected in 1932. The depth of the Depression was in 1936. Recovery started in 1937-1938, driven by the coming war in Europe. (As always with things economic, it is hard to set firm dates, except for the initial Crash.)

  9. ZT’s got it. But, after we were in it, it’s hard to say times were really prosperous. Remember, the US lost about a half a million men that never came back and during the war, there was pretty severe rationing of almost everything of any importance. I can remember that when a store got some penny bubble-gum, there’d be a 2-block line of people waiting to get a single piece.

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