Okay, I admit that is something of an overstatement of Krugman’s position. But not by much. Maybe we can just let Hayek respond:
We could have done better if we’d only spent more. Too bad that only happens when there’s a world war. You can carp all you want about stats and regression. Do you deny that world war cut short the Depression?
Wow. One data point and you’re jumping for joy. The last time I checked wars only destroy. There was no multiplier. Consumption just shank as we used scarce resources for every new tank. Pretty perverse to call that prosperity. Ration meat. Ration butter. A life of austerity. When that war spending ended, your friends cried disaster. Yet the economy thrived and grew faster.