After posting Tom Wood’s video about Keynes vs history ( https://m.youtube.com/watch?v=6XbG6aIUlog ) the response I got from a Krugmanite was that despite Tom’s assertion that 1946 was an economical boom in fact ” The GDP fell 10.9 percent from 1945 to 1946, did not begin to rise until the fourth quarter of 1947, and still did not reach 1945 levels until the third quarter of 1950. In the Great Recession, real GDP fell 3.8 percent peak to trough. But, nope – nothing happened after the war – only if you don’t have enough intellectual curiosity to make the effort to check it out for yourself and just accept what this clown is telling you. But I guess that just blah, blah, blah. By the way, this is from 2010 – five years ago. Austrians predicted the debt would cause interest rates to soar. Didn’t happen. They predicted the collapse of the dollar and hyper inflation. Neither happened. Just more blah, blah, blah, Bob? http://research.stlouisfed.org/fred2/graph/?g=1cgR
Note the private spending from pent-up demand. More blah, blah, blah. http://www.independent.org/images/article_images/charts/990900_fig3_central.gif
Moreover, GDP includes government expenditures. So as the government drastically cut its expenditures after the war, GDP fell. This decline is an artifact of the way GDP is calculated. As government expenditures were falling, however, consumption was increasing. Here is Gene Smiley’s analysis of the wartime economy and transition to peacetime.