David R. Henderson  

My Capitol Hill Talk on Budget Cutting

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Yesterday I gave a talk on Capitol Hill for Mercatus's Capitol Hill College. The talk is based on my two studies for Mercatus, Canada's Budget Triumph and The U.S. Postwar Miracle. Mercatus is fast: the talk is already on line here.


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CATEGORIES: Fiscal Policy



COMMENTS (7 to date)
Liam writes:

David,

I really liked this talk. It was well done. Was the audience students? They semed a little tepid in responding when you asked about savings.

This also makes me wonder about another more recent times when a large Government switched from price controls and shortages to a free market and massive privitization. I mean of course the fall of the Soviet Union.

If you were to look at that data, would it support the same results as was seen after WWII in the US? I lived in Czechoslovakia at the time and suddenly people were so excited because they could now buy things like a pair of jeans, peanut butter, fresh milk and Snickers bars.

David R. Henderson writes:

Liam,
Thanks. The audience was Capitol Hill staffers. Re the Soviet Union, I don't think, for reasons G. Warren Nutter laid out, that the pre-fall data mean anything. They're even worse than the GNP data from WWII U.S.

Liam writes:

Hi Daivid,

That's why I think it's a very interesting point because it is representive of the data from 1946 in the US. How can you say there is a recession when you are coming off of price controls, production restrictions and a population that is embracing consumerism? The condidtions were not to the same degree (just as the Canadian conditions were not the same as the earlier US period) but I think still relevant.

So they are staffers! That explains why they are not forthcomming with answers to questions and the questions themselves. Fear of being singled out.

So were they convinced? You can't tell from the video if there was any agreement in your question to them.

An interesting thing at that time in Canada was that Paul Martin was very quiet about the surpluses and played them down at every opportunity. When the Canadian Press finally took the surpluses mainstream there was a very bid demand from politicians that they give some of that back to the people yet oddly it was not "the people" but instead the MPPs demanding more.

Douglass Holmes writes:

That was an excellent talk, well worth the hour out of my day. Thanks.
I especially appreciated your succinct reason for the post-war boom; Roosevelt died. And the political analysis for the end of price controls was excellent.
Another thing was this issue of the 'recession' that followed WWII. I wish that we had that kind of recession right. I wouldn't mind an unemployment below 6%.

Rick writes:

From the NYT this morning, "When Congress moved in 2008 to sweeten tuition payments for veterans, it was celebrated as a way to ensure that military personnel returning from Iraq and Afghanistan could go to college at no cost and to replicate the historic benefits society gained from the G.I. Bill after World War II."

In your talk you stated that only 8% of returning vets used the GI Bill in 1946, the peak year of GI Bill usage.

Funny how we continue to replicate the historic false assumptions of government spending and its benefits. Thanks for your talk, David.

David Ramirez writes:

David,

Good talk, David. I enjoyed it and look forward to seeing more like it.

Some of the common explainations I have heard for the boom following WW2 was that Europe was in ruins and many of its factories had been destroyed. However, the US homeland escaped undamaged by the war. Could the post war boom and the US' rise to super power be attributed to US factories exporting goods to Europe and other areas damaged during the war?

I would love to hear your thoughts.

Thanks,
David Ramirez

David Ramirez writes:

David,

Good talk, David. I enjoyed it and look forward to seeing more like it.

Some of the common explainations I have heard for the boom following WW2 was that Europe was in ruins and many of its factories had been destroyed. However, the US homeland escaped undamaged by the war. Could the post war boom and the US' rise to super power be attributed to US factories exporting goods to Europe and other areas damaged during the war?

I would love to hear your thoughts.

Thanks,
David Ramirez

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