One of the more absurd notions accepted as fact today is the belief that World War II ended the Great Depression. The Great Depression ended only after the United States shifted from a wartime economy to a peacetime one.

Political economist Robert Higgs has detailed how the sudden relief from heavy wartime taxation and regulation encouraged greater capital investment for businesses. Returning military servicemen, eager to rebuild their private lives, often accepted lower wages than recommended by government economists in anticipation of working their way to better pay. The huge supply of war bonds, worth about $185 billion, was largely cashed out. The result of all this was an explosion of entrepreneurial activity causing an economic upsurge not seen before or since.

Steven E. Yorgason