"Only if they work for the government, which is a net drain on the economy."
True, but only if you don't count the security umbrella that DOD gives to the economy as a whole. If you only look at cost, the military is a huge drag on the economy. Now factor in the benefit of being able to do business in peace and security, and DOD becomes a bargain. Wall Street would not have recovered after 911 if the military weren't on the case, killing bad guys.
Not so, Health and Human Services, HUD, etc., but DOD is a net gain to the US economy.
While I don't disagree, it's hard to explain, and even harder to prove, in strictly econometric terms. I think it has something to do with the people who receive the money actually working for it, and being of a high enough socioeconomic level (except the grunts of course) that they spend more of their income on big ticket items and so called "luxury goods", which seem to have a higher multiplier factor than the bare necessities which most (but not all of course) welfare and other social spending dollars go to.
You're assuming that huge military expenditures are necessary to peace and security.
In the '80s, my recollection of the situation was that the US and Japan were each graduating about 100,000 engineers per year. About half of ours went into military jobs and about half into civilian industry. Most of Japan's went into civilian industry, giving them a two to one advantage in high tech businesses, despite having a smaller population.
Note that China and India aren't the only other players.