someone said: >I am disappointed that David Harvey believes that a global
New Deal would accomplish anything. It didn't the first time around. WWII
lifted the USA out of the depression, not deficit spending.<
this is misconceived. It was the deficit spending based on the war spending
associated with WWII that lifted the USA out of the Depression. What the author
means to say, I assume, is that it wasn't _civilian_ deficit spending that lifted the
USA out of depression. This is true.
It should also be noted that FDR's New Deal _didn't try_ to use civilian deficit
spending to "prime the pump" during the Depression. Carey Brown's research
showed long ago that deficit spending during the 1930s was almost entirely
_due to_ the Depression (since low GDP hurt tax revenues and to a lesser extent
boosted transfer payments). Traditional fiscal policy ideas still ruled the roost,
with
war being the standard exception to the hard-core "balance the budget" dictum.
It was only in the 1960s that the idea of active fiscal policy to stimulate the economy
when in recession (temporarily) took hold in the US.
("Keynesian" active fiscal policy played a role earlier in other countries. The
burgeoning social-democratic movement in Sweden encouraged it, as did the
Nazi take-over in Germany. The latter's expansionary fiscal policy wasn't all
military,
unless the autobahns are considered entirely military.)
In theory, a global government (world state) _could_ engage in active fiscal policy
to stimulate a depressed world economy (if the sources of stagnation were all on
the demand side). I doubt that it _would_ do so unless (1) there was some sort of war,
e.g., "mopping up" the insurgent forces resisting the imposition of a world state; or
(2) there was a strong social movement of workers and other dominated forces that
counteracted the normal financier consensus that balanced budgets or budget
surpluses should rule, pushing toward some sort of world social democracy. Even
then, there are limits, since eventually stimulative fiscal policy would reduce the
reserve
army of the unemployed, so that profits would be threatened.
Jim
