Posted on 11/16/2009 2:32:27 PM PST by blam
Would The U.S. Start A War To Stimulate The Economy?
Politics / US Politics
Nov 16, 2009 - 08:08 AM
By: Washingtons_Blog
I've written two essays attempting to disprove "military Keynesianism" - the idea that military spending is the best stimulus. See this and this.
In response, a reader challenged me to prove that anyone would advocate military spending or war as a fiscal stimulus.
In fact, the concept of military Keynesianism is so widespread that there are some half million web pages discussing the topic.
And many leading economists and political pundits sing its praises.
For example, Martin Feldstein - chairman of the Council of Economic Advisers under President Reagan, an economics professor at Harvard, and a member of The Wall Street Journal's board of contributors - wrote an op-ed in the Journal last December entitled "Defense Spending Would Be Great Stimulus".
And as the Cato Institute notes:
Bill Kristol agrees. Noting that the military was "spending all kinds of money already," Mr. Kristol wondered aloud, "If you're buying 2,000 Humvees a month, why not buy 3,000? If you're refurbishing two military bases, why not refurbish five?"
***
This is not the first time that defense spending has been endorsed as a way to jump-start the economy. Nearly five decades ago, economic advisers to President Kennedy urged him to increase military spending as an economic stimulus...
Similar arguments are heard today. The members of Connecticut's congressional delegation have been particularly outspoken in their support for the Virginia-class submarine, and they haven't been shy about pointing to the jobs that the program provides in their home state.
The Marine Corps' V-22 Osprey program wins support on similar grounds. Despite serious concerns about crew safety and comfort, the V-22 program employs workers in Pennsylvania, New Jersey, Delaware and Texas, and a number of other states.
Professors of political economy Jonathan Nitzan and Shimshon Bichler write:
Theories of Military Keynesianism and the Military-Industrial Complex became popular after the Second World War, and perhaps for a good reason. The prospect of military demobilization, particularly in the United States, seemed alarming.
The U.S. elite remembered vividly how soaring military spending had pulled the world out of the Great Depression, and it feared that falling military budgets would reverse this process.
If that were to happen, the expectation was that business would tumble,unemployment would soar, and the legitimacy of free-market capitalism would again be called into question.
Seeking to avert this prospect, in 1950 the U.S. National Security Council drafted a top-secret document, NSC-68.
The document, which was declassified only in 1977, explicitly called on the government to use higher military spending as a way of preventing such an outcome.
[snip]
I would think infrastructure spending would have the same effect. I wouldn’t want the demons running it. But If I was pres, I would declare this country CLOSED FOR REMODELING! First, the energy system, Drilling for oil to help control the price of the market and the building of numerous nuclear power plants. 2nd, Transportation system we need more train travel in this country and more efficient mass trnsit in metro areas. This would reduce oil consumption. lastly, a water distribution system to mitigate the effects of drought on parts of the country.
Just some thoughts!
Would The U.S. Start A War To Stimulate The Economy? No.
Would the marxist punk start a war to help his falling numbers? Maybe.
BINGO!
Not so. A fellow can learn a new trade.
Good point.
“As an aside, I think no one should be allowed to vote who hasn’t read Bastiat.”
That’s not a bad idea. Of course, limitations on the franchise are almost impossible to enact these days. Perhaps we could bypass civil rights issues by telling everyone he was black.
The spending required for most military action produces much more debt that needs to be repaid than it does growth. I can’t think of an era in history where a society has been successful in conquest out of the pockets of the citizens. I can think of many examples where much was financed from the pockets/resources of the fallen nations. We don’t have the national will to do that - just think of the widespread aversion to using Iraqi oil to pay for the war in Iraq. I think we need to do a much better job of clarifying what is genuinely in our national interests.
Who are we going to fight? Eritrea?
It’s uh, loaded question. If any country is weak it is likely to be attacked, at least before it’s more weaponized neighbors. Weakness invites aggression, not saying I like that. One of the attractions of America is the openness where everything doesn’t need to be locked up.
America, no. Obama, more than likely, as a war would give him an enemy to focus attention on, declare martial law, and suspend elections.
Have we really come to a mindset that says wars or social programs are our only feasible options to keep the economy rolling? Has the political debate come down to nothing more than which is better -- "America the Warmonger"? Or, a "Socialist America"?
Forgive me, but I really don't care which "stimulates the economy more", as we must have some better options for economic stimulus than just these.
America needs to spend enough on the military to protect herself, period. Any spending beyond that is waste, no matter how they want to package it as "good for the economy". Likewise, the social programs. Anything beyond that is theft.
This "military vs social programs choice" reminds me of a scene in the film Zorba the Greek where this woman is dying in bed while the villagers anticipating her death are shamelessly stealing all contents of the room where she'll breathe her last breath. And the villagers are fighting over her stuff. The woman can see it happening, but she is too weak to stop it, and the villagers don't care what she thinks because she can't do anything about it.
The dying woman in the film could reprensent the American taxpayer. The Libs and the necon politicians are the villagers stealing her stuff and fighting over how to use it: "Military!" "No, social programs!" "Gimme that!" "No, you give me that!" And it never occurs to any of the villagers/politicians just how outrageous their behavior is.
For what it’s worth... I like your ideas.
>>I know the big story is that WWII got the U.S. out of the depression but wasn’t it actually the post-WWII boom?
Many Austrian school economists would tell you that it didn’t happen until Eisenhower and the end of price controls and the effective use of the Taft-Hartley Act, which greatly weakened union strangleholds on business. It had been passed over Truman’s veto, but really needed a President to wield it to get the full business-friendly effect.
You can’t get economy stimulus by spending money. Its a fallacy WAY too many economist hold, that somehow you create wealth by breaking windows then building it up again
I thought we were in a war.
The US spends over 50% of the defense spending of the entire world.
The US + Europe + Japan + Canada + Australia + India spends on the order of 85% of the world’s defense budget.
Its higly probable that continuing to occupy S. Korea, Japan, Germany, Italy, etc. are not “vital” to American national security. Global American security through the use forward projection of power on existing American possessions only, especially Guam and Diego Garcia, would be immensely cheaper than the current deployment of forces, and would force a rethinking of the purposes of those forces and their size.
Admitting defeat before going out to war?
The US cannot afford this wastefulness.
While I think troops could be withdrawn from a number of spots, that’s not the budget issue and you know it. Nowhere close. “Entitlement” spending, Social Security, Medicare, and other idiocies are the central problem, and it doesn’t matter if taxes are “historically low,” they are ridiculously HIGH for the current business climate. I repeat, there is NEVER a time not to cut taxes.
And we were the only industrial nation that wasn't devastated by WWII, giving us a huge competitive advantage for at least 20 years.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.