The Depression that Wasn't
By Arnold Kling
[President Roosevelt’s] key advisers were frantic at the possibility of the Great Depression’s return when the war ended and the soldiers came home.
I mentioned this in my post on Roger Farmer’s book. If the Great Depression is the most difficult economic event for non-Keynesian economists to explain, then the late 1940’s are the most difficult period for Keynesians to explain. From a Keynesian perspective, the government did everything wrong–it slashed spending and reduced spending. Yet, instead of falling into Depression, the economy did fine.