But no, it is not to be. Mitch McConnell and even Donald Trump, whose ignorance of basic economics is exceeded only by his staggering historical illiteracy, are, voilà, suddenly worried about running up the national debt. This is, of course, after these characters pushed through a $2 trillion tax cut for the wealthy and big corporations in the days when coronavirus was still percolating only in bats. And that was on top of an equally large tax cut that Bush 43 gift-wrapped for the usual Republican suspects back in the aughts.
It’s instructive to look at what World War II cost America and compare it to today: The war cost $4.1 trillion in 2020 dollars. If you subtract the sale of war bonds, which covered 63 percent of the cost, you are left with $1.517 trillion in war debt (in 2020 dollars) at the end of the conflict, which amounted to 329 percent of GDP (without even considering the federal government’s non-war debt). Compare that to today, when even adding in $3 trillion (so far) of Covid-19 expenditures, total public debt adds up to 128 percent of GDP. We have a very long way to go before we arrive at World War II debt-to-GDP ratios.
What Franklin Roosevelt, Harry Truman and Congress understood back then was that a nation facing an existential crisis must spend whatever it takes to survive. Trump and McConnell and their clueless colleagues clearly do not understand that and we are the ones who will suffer the consequences.
By saving the country, the West and democracy back then, the money invested in the war was money well spent. Moreover, after the war, the wise growth policies pursued by the Truman, Eisenhower and Kennedy administrations brought that ratio down to pre-war levels by 1962. The 30 years of robust economic growth that followed the war give the lie to Trump’s spurious claims of creating “the greatest economy in history.”
We need to spend whatever it takes to assure our physical and economic survival. Anything less is a dereliction of duty and risks a societal devastation from which we might never recover.
May 22, 2020