I always heard it was all the government spending for WWII that got the US out of the depression which they probably would not have been inclined to do otherwise.

In the example given, it assumes the baker would have bought a suit or something rather than saving the money. Or perhaps the handyman would be willing to work for extra bread which the baker would have thrown out anyway.

I have also heard of disasters helping in a round about way. As long as the existing equipment is humming along the company is not willing to pay to replace it even if it would be an advantage in the long run. However, the equipment were to be destroyed then why would have to replace it and get the benefit.

I'm not a historian, economist, or much of anything.

9/11 occurred during a recession, the Bush recession.

Kobe occurred during a recession, the lost decade of Japan.

Which would be better for the economy, a) the US not in a recession and no 9/11, b) the US in a recession and no 9/11, c) the US in a recession and 9/11

Which would be better for the economy, a) Japan not in a recession and no Kobe, b) Japan in a recession, and no Kobe, c) Japan in a recession and Kobe?

Well, in both cases, a is the best choice, but c is sadly better than b.

As The Former Banker says, the choices in the examples in the video are not equivalent to Bastiat's village. In Bastiat's village, the baker was going to buy a suit. During the Great Depression, at the time of WWII, Gov't had stopped buying things and wasn't going to buy anything more.

Here's a link to a guy that says it better:

http://www.economistsdoitwithmodels.com/2010/03/31/mostly-correct-and-creepy-at-the-same-time-broken-windows-edition/

Here is Paul Krugman, agreeing with Bush, and Bush agreeing with him, and Paul Krugman and Maynard Keynes agreeing with Bastiat. Careful reading this, your head may explode.

http://krugman.blogs.nytimes.com/2008/02/19/bush-is-right-about-something/

Bush is right about something
Hate to say this, but he’s right when he says

I think actually the spending in the war might help with jobs…because we’re buying equipment, and people are working. I think this economy is down because we built too many houses and the economy’s adjusting.
In fact, I’d say that the sources of the economy’s expansion from 2003 to 2007 were, in order, the housing bubble, the war, and — very much in third place — tax cuts.

Of course, we could have gotten just as much or more stimulus by spending $10 billion a month on actually useful stuff– think how much domestic infrastructure could have been built or repaired for the cost of this miserable war. But the war was what we got.

Bush tax cuts = Bush tax deferrals. All the $5trillion Bush put on the credit card is still drawing interest and eventually will have to be paid for.

I seem to remember Katrina happening post 9/11 -- was there there a bump in our economy, or was it the PRC's?

One More Time: Congress, not the President, has 100% of the duty to handle the nation's money. Taxes, spending, regulation of banks: all belong to Congress.

I'm happy you've found someone to hate (you're not stabbing your neighbors), but no matter who is President, Congress's role is set in stone by the Constitution.

No matter what you might say otherwise.

Rad, your point is taken, with a clarification (and I'm sure you know this) the process starts with the President proposing the budget. Of course, Congress can, and has done so in the past, totally reject the President's budget and craft its own. And at that point, the President's options are to like it or lump it; veto is seldom a practical option. That's why I wouldn't mind seeing a line-item veto power -- but it has to be done by Constitutional amendment, not the screwy way that Gringich pushed through in the 1990s that was, properly, shot down by the SC.

As for WWII: Don't forget that there was another recession right after the war ended. I think the reasons for the wartime recovery were threefold: (1) FDR's anti-business policies got set aside for the duration, (2) no union "activity" during the war, and (3) big R&D investments. That last eventually paid off big time from about 1950-1970.