Economic ProspectsNew Labor Forum • 135pression. More specifically, the Depressionended thanks to a huge expansion in deficitspending by the government to finance the wareffort. This meant that the government was in-jecting more money into the economy to re-cruit soldiers and to build weapons than it wasreceiving in tax revenues.The Vietnam War offers a similar, if some-what less dramatic, example. Vietnam was ahorribly destructive imperialist venture. But thedeficit spending to finance the war pushed theunemployment rate below 4 percent by the endof the 1960s. Employers faced labor shortagesas a result. To attract the workers they neededto maintain their business operations, they wereforced to raise wages, improve workplace con-ditions, and reduce job-market discriminationagainst minorities.Reflecting on these and related experi-ences, some of the most astute observers of theU.S. economy over time have argued that large-scale military spending is a necessary prop tothe U.S. economy. The most forceful statement
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