WELCOME TO TOM'S BLOG

Thank you for stopping by for a visit. You are invited to read and comment on anything posted on this blog. I advocate the maximum amount of Personal and Economic Liberty, consistent with the defense of individual rights. I am fiscally conservative yet socially tolerant, I favor lower taxes, free trade, individual rights, strong national defense and limited government. I subscribe to the Freedom Fighters Creed: I am an American Patriot, defender of the Constitution, First Principles and Essential Liberty.

I believe that buried deep down inside every Conservative you'll find a Libertarian - And Inside Every Liberal Is A Totalitarian Screaming To Get Out.

"One of the penalties of refusing to participate in politics is that you end up being governed by your inferiors" - Plato

FYI any crude or vulgar comments will be removed from the blog.

Saturday, November 6, 2010

The U.S. Postwar Miracle

We often hear that big cuts in government spending over a short time are a bad idea. The case against big cuts, typically made by Keynesian economists, is twofold. First, large cuts in government spending, with no offsetting tax cuts, would lead to a large drop in aggregate demand for goods and services, thus causing a recession or even a depression. Second, with a major shift in demand (fewer government goods and services and more private ones), the economy will experience a wrenching readjustment, during which people will be unemployed and the economy will slow.

Yet, this scenario has already occurred in the United States, and the result was an
astonishing boom. In the four years from peak World War II spending in 1944 to 1948,
the U.S. government cut spending by $72 billion—a 75-percent reduction.2 It brought
federal spending down from a peak of 44 percent of gross national product (GNP) in
1944 to only 8.9 percent in 1948, a drop of over 35 percentage points of GNP
CONTINUE READING .


Source: Mercatus Center
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