Barkley, I don't see how Hitler's Germany gives evidence of anything related to the hypothesis that an increase in government spending, not financed by additional money, would have a good effect, including the reduction of unemployment. The German "economy" of the period is hardly the kind of economy about which Keynes and the Keynesians were writing. In fact, there may be no way to test the hypothesis effectively even for a market economy. This was my point about Sims' view, which Kevin Hoover seemed to confirm. It is not difficult to explain how a military dictatorship can reduce or eliminate unemployment. Regarding the German "economy," here is how Mises described it, although he gave no time line. "It is true that there are still profits in Germany. Some enterprises even make much higher profits than in the last years of the Weimar regime. But the significance of this fact is quite different from what the critics believe. There is strict control of private spending. No German capitalist or entrepreneur (shop manager) or any one else is free to spend more money on his consumption than the government considers adequate to his rank and position in the service of the nation. The surplus must be deposited with the banks or invested in domestic bonds or in the stock of German corporations wholly controlled by the government. Hoarding of money or banknotes is strictly forbidden and punished as high treason. Even before the war there were no imports of luxury goods from abroad, and their domestic production has long since been discontinued. Nobody is free to buy more food and clothing than the allotted ration. Rents are frozen; furniture and all other goods are unattainable. Travel abroad is permitted only on government errands... German corporations are not free to distribute their profits to the shareholders. The amount of the dividends is strictly limited according to a highly complicated legal technique. It has been asserted that this does not constitute a serious check, as the corporations are free to water the stock. This is an error. They are free to increase their nominal stock only out of profits made and declared and taxed as such in previous years but not distributed to the shareholders. As all private consumption is strictly limited and controlled by the government, and as all unconsumed income must be invested, which means virtually lent to the government, high profits are nothing but a subtle method of taxation. The consumer has to pay high prices and business is nominally profitable. But the greater the profits are, the more the government funds are swelled. The government gets the money either as taxes or as loans. And everybody must be aware that these loans will one day be repudiated. For many years German business has not been in a position to replace its equipment. At the end of the war the assets of corporations and private firms will consist mainly of worn-out machinery and various doubtful claims against the government. Warring Germany lives on its capital stock, i.e., on the capital nominally and seemingly owned by its capitalists. Mises, OMNIPOTENT GOVERNMENT, online at the mises.org website. Pat Gunning