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Econ%20104%20Syllabus--Pollin--Fall%20-page79 - pression...

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Economic Prospects New Labor Forum 135 pression. More specifically, the Depression ended thanks to a huge expansion in deficit spending by the government to finance the war effort. This meant that the government was in- jecting more money into the economy to re- cruit soldiers and to build weapons than it was receiving in tax revenues. The Vietnam War offers a similar, if some- what less dramatic, example. Vietnam was a horribly destructive imperialist venture. But the deficit spending to finance the war pushed the unemployment rate below 4 percent by the end of the 1960s. Employers faced labor shortages as a result. To attract the workers they needed to maintain their business operations, they were forced to raise wages, improve workplace con- ditions, and reduce job-market discrimination against minorities. Reflecting on these and related experi- ences, some of the most astute observers of the U.S. economy over time have argued that large- scale military spending is a necessary prop to the U.S. economy. The most forceful statement
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