Isn’t war good for the economy?
Since the collapse of Lehman, how many times have both politicians and pundits suggested that wars act as economic stimuli? Aren’t we taught that it was World War II that ultimately got the US out of the Depression?
Worried that the US may not find any war(s) big enough to do the trick again?
Well turn that frown upside down because I have good news and great news!
First, the good news. There are still several active wars and armed conflicts across the globe. War torn regions need rebuilding. Rebuilding creates jobs. Jobs need funding. Funding requires spending. Which brings us to…
The great news! Secretary Gates is asking for an additional $83 billion to fund these stimulating wars through 2009. This is on top of the $612 billion defense spending for 2009.
Heroic. Stimulative!
Economist Paul Krugman was disappointed that the ARRA was a mindlessly frugal $787 billion, so with any luck, more wealth creating police actions will take place in the coming months.
And by hook or crook, we’ll ultimately be able to surpass that lofty WW II mark sooner rather than later.
Lear K
February 20th, 2009 at 11:34 am
If you were at the top!
Vassili
February 21st, 2009 at 2:22 pm
It seems to me that most people in the US that are driving along that thought path forget that during WWII US were effectively selling this and that to ALL sides in the conflict, keeping their own military participation quite limited.
So – selling to parties at war is smart economic policy (even if morally broken).
Spending on your own Army… just remember Germany – supposedly after Hitler had built mighty military machine by 1938 or so he was approached by generals that told him – “We need to start the war, or we’ll be broke in couple years”. So they did. They got as broken as it gets by 1945.
It should be understood clearly that effectively USA had appropriated German economy by the way of war fought but USSR, and funded to a great extent by the US.
Now – I simply don’t see this scenario happening these days. First of all – there is no country that is willing to fight the war on behalf of the US. Only Israel, but it does not seem to work out in any way. There is no other party that is forced to start the war, or else they’d be broken.
The only party like that is the US, but…. Russia has enough nuclear warhead and will. The only country that US may invade is China. But once again – Chinese and Russian nuclear weaponry make this very unappealing.
US have effectively emulated German behavior of pre 1941 war period, taking control over weak er countries – yet, once again, I would not dare to compare status of Europe under German control, to status of Middle East under US intervention.
So… interesting, I hope to live another 20 years to see how it would resolve, since I don’t see any probably scenario so far.
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