Comments on: IS JIM GRANT THE LATEST TO BE DRINKING THE KOOL-AID? http://www.ritholtz.com/blog/2009/09/is-jim-grant-the-latest-to-be-drinking-the-kool-aid/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Tue, 14 Feb 2012 23:28:32 +0000 hourly 1 http://wordpress.org/?v=3.0.5 By: RodgerMitchell http://www.ritholtz.com/blog/2009/09/is-jim-grant-the-latest-to-be-drinking-the-kool-aid/comment-page-1/#comment-218983 RodgerMitchell Fri, 25 Sep 2009 03:51:56 +0000 http://www.ritholtz.com/blog/?p=38959#comment-218983 Quote from the above blog: ". . . even a child knows that it was WWII that brought the economy out of its malaise, not the seven years of New Deal stimulus." The idea that wars stimulate economies is so foolish as to be barely worth comment, but it's a common bit of popular wisdom, so here goes: Wars kill people. Killing people does not stimulate the economy. It's government deficit *spending* for wars that stimulates the economy. In that sense, deficit spending for wars is no different from government deficit spending for any other purpose. The only problem with the deficit spending during the Great Depression: Too little, too late. The massive deficit spending for WWII stimulated the economy. Period. And by the way, it's doing the same thing now. Rodger Malcolm Mitchell http://rodgermmitchell.wordpress.com Quote from the above blog: “. . . even a child knows that it was WWII that brought the economy out of
its malaise, not the seven years of New Deal stimulus.” The idea that wars stimulate economies is so foolish as to be barely worth comment, but it’s a common bit of popular wisdom, so here goes:

Wars kill people. Killing people does not stimulate the economy. It’s government deficit *spending* for wars that stimulates the economy. In that sense, deficit spending for wars is no different from government deficit spending for any other purpose. The only problem with the deficit spending during the Great Depression: Too little, too late.

The massive deficit spending for WWII stimulated the economy. Period. And by the way, it’s doing the same thing now.

Rodger Malcolm Mitchell
http://rodgermmitchell.wordpress.com

]]> By: doodad http://www.ritholtz.com/blog/2009/09/is-jim-grant-the-latest-to-be-drinking-the-kool-aid/comment-page-1/#comment-218232 doodad Wed, 23 Sep 2009 17:57:26 +0000 http://www.ritholtz.com/blog/?p=38959#comment-218232 Mr. Grant's mistake is only to believe (like everyone else) that the stock market is an accurate reflection of the US economy as a whole. If the US economy goes up, so does the stock market. Ergo, how could the stock market go up without the economy also going up? Everything else in his argument only goes to support that belief. All contrary indications must be erroneous. Might as well argue the economy is doing well because the GDP is up. See Stiglitz. Mr. Grant’s mistake is only to believe (like everyone else) that the stock market is an accurate reflection of the US economy as a whole.

If the US economy goes up, so does the stock market. Ergo, how could the stock market go up without the economy also going up? Everything else in his argument only goes to support that belief. All contrary indications must be erroneous.

Might as well argue the economy is doing well because the GDP is up. See Stiglitz.

]]> By: leftback http://www.ritholtz.com/blog/2009/09/is-jim-grant-the-latest-to-be-drinking-the-kool-aid/comment-page-1/#comment-218224 leftback Wed, 23 Sep 2009 17:34:25 +0000 http://www.ritholtz.com/blog/?p=38959#comment-218224 Jim Grant or Jim Jones? Jim Grant or Jim Jones?

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