In response to:

Tim Geithner and the Return of Moon-Yogurt Accounting

QUESTION: I wasn't around during World War II. but have heard and read many an expert saying that it took the war to end the Great Depression; that FDR's various alphabet programs did little or nothing to curtail the high unemployment and lack of economic activity. Yet, before and surely during the war, the U.S. government must have, literally, printed gazillions of dollars in order to fund the social programs and the war production. Can someone please explain to me, in simple to understand terms, why massive inflation did not follow all that printing press activity as we are now told is bound to follow the "quantitative easing" and other dumb tactics we are now experiencing? The Keynesian spending must have gone on for years both before
clovett Wrote: Dec 03, 2012 1:37 PM
Because at the end of the war, the US was the only industrialized nation that had not been massively bombed. We still had all the heavy industry and no one else did. We sold our goods, without much competition, to everyone. Having that kind of trade surplus helps a whole lot, just ask China.
Robert97 Wrote: Dec 03, 2012 1:45 PM
Also, after WWII came the Marshall Plan, which sopped up some of the US money to pay for goods & services in reonstructing Europe.

Treasury Secretary Tim Geithner has had a rough few days.  Late last week, Sen. Mitch McConnell laughed in his face when he presented President Obama's breathtaking fiscal cliff "deal" -- which raises taxes by $1.6 trillion, abolishes the debt limit (!), spends tens of billions on a new stimulus (!!), and offers no specific or guaranteed spending reductions to speak of.  Then Geithner appeared on Fox News Sunday to defend the proposal, and things went...not so well.  When host Chris Wallace pilloried his claim of illusory "savings" on war spending, Geithner was flummoxed (via