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]
This administration canceled the F-22. Don’t expect much from them in the way of defense spending increases that actually save lives and create jobs.
Yes.
No net economic growth comes from blowing things up and killing people.
(In the main; some corner cases exist)
Go build 1,000 tanks, roll them off the assembly line, and destroy them yourself. At least nobody dies.
Is that economic growth?
I don’t suppose it has occurred to any of these geniuses that we’re already IN a war.
War, yes. Of course. Iraq and Afghanistan and Pakistan aren’t enough.
Why not just start an American Civil War II? They could kill a third of the population in one swoop, create enough jobs from not only military positions, but rebuilding infrastructure, save oil, food, water and other commodities, and create a new wealth class from the survivors. /s
*yes, I’m being sarcastic.
whatever works....
The only way war can be economically beneficial is if the army pillages enough to pay for itself and then some. This never happens with large-scale wars, not even with “reparations”. I suppose the CIA could morph itself into an elite thief squad, stealing from people around the globe. In any case, it wouldn’t be productive; it would be an international form of taxation.
I wish we’d finish the current two we are in.
Not since last January. Now we're in a bowing exit.
They could just as easily spend 100’s of billions on NASA with the goal of setting up a moonbase, no war neccessary.
Keynsian economics is perverse.
I’m not overly convinced that wars are good for the economy. 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?
If you add it all up, I think wars cost more than they create.
These people are radical ‘rats, they’ll do anything to save their hides. So, yes even BHO would start a war if it’ll do him some good.
The government spent $70 billion on defense last month. That’s $840 billion per year. Frankly, that is way too high for us to afford, and far more than any reasonable need.
Most defense spending is the same as building pyramids - a waste of economic resources on an unproductive activity.
Imagine how much lower taxes and the deficit could be if conservatives worked for more reasonable defense spending levels?
Good Point.
“whatever works....”
That’s just the thing. It doesn’t work.
Don't give them any ideas. Forced interment for conservatives!!!
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