>But (a) Didn't WW 2 revive the economy (1945 and after) by destroying so
>much capital rather than through the pump-priming effect of war
>production itself
WW II got the U.S. out of the depression because of truly massive military spending. Here's the military share of GDP for the war years:
>1941 11.3%
>1942 31.6%
>1943 42.4%
>1944 43.1%
>1945 36.8%
The Clinton-era low was 3.8% in 2000; we're up to 4.2% this year.
With demobilization there were great fears the depression would return. There was the post-war satisfaction of pent-up consumer demand after 15 years of depression and war, but by 1950 or so, that appeared to peter out. Fortunately, the Korean War came to the rescue. Military share of GDP again:
>1950 6.7%
>1951 11.6%
>1952 14.6%
>1953 14.7%
>1954 12.9%
>1955 11.3%
Not WW II levels, but pretty damned high.
Then there was the international dimension: the need to get dollars abroad and restart the world trading system. There were the Marshall Plan, U.S. base building abroad, the first wave of foreign investment by budding multinationals. Etc.
> and (b) Wasn't the boom after the war due more to (1)
>the interstate system and all the investment (suburbs, automobiles,
>motels) that triggered and (2) the GI bill -- rather than to the Cold
>War and its Hot Spots?????????????
All those things were part of it, but military spending was big and important. It stayed around 10% of GDP through the 1960s before falling to 5.7% at the end of the 1970s. The Carter-Reagan buildup brought it up to 7.5% in 1986, but it started falling again, bottoming out 14 years later.
Doug