Weaponized Keynesians?

A regular reader of Antiwar.com writes, “Professor Joe Salerno, academic vice president of the Ludwig von Mises Institute in a recorded talk from the institute’s 30th anniversary celebration, talks about the Keynesian architects of the US Warfare state. Salerno explains how Keynesian economics teaches that wasteful consumption of all kinds, including warfare, generates additional income which makes society wealthier. For this reason, academic and government Keynesian economists have recommended additional military spending to help the economy out of the current recession.”

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25 thoughts on “Weaponized Keynesians?”

  1. Angela, this is what The People have been taught to believe. Every "military town" in this country firmly believes, even sincerely argues, that "their" base is the "economic engine" driving the local economy.

    And their eyes glaze over with incomprehension when one tries to explain the destructive future costs these "economic engines" will have on their descendents, let alone explanations of depriving the productive elements of society of resources.

    Every dollar vacuumed out of a military installation is a slow-acting economic poison.

    1. Exactly. The Keynesians love to bloviate about how much money the military "pumps into" those towns, but they never mention how much the military also pumps out of them, in the form of:

      * infrastructure costs (roads, utilities, etc.)
      * more crowded schools
      * higher crime
      * (most important) the presence of a large number of transients with no ties to or interest in the local community, most of whom would rather not be there

      During my time in the USAF I spent two training tours at Chanute AFB, which was (to put it mildly) a dump. The Pentagon had wanted to close it for years, but influential Congresscritters kept it open because the adjoining town's leaders insisted it would disintegrate if the base shut down. Well, the first BRAC did close it in 1993, and the town survived. I guarantee you no one who ever spent any time at Chanute mourned its passing.

      1. Then again, there are other "Leechburgs" that will turn into ghost towns if their beloved bases close down, because there is no other reason for these towns to exist (and no other obvious resources for economic sustenance in the area) than the bases' presence. Sierra Vista, Arizona comes readily to mind as an example. If sanity ever again prevails in Amerika (doubtful, but we can always hope) and that blight on the Southeastern Arizona desert called Fort Huachuca were to be shut down COMPLETELY, Sierra Vista will become even more of a ghost town than Tombstone, its neighbor 20 minutes away. The one major difference between the two towns will be that no one will have any reason or desire to turn what will remain of Sierra Vista into a tourist attraction.

        Good riddance to bad rubbish.

  3. I’m generally sympathetic to the Austrian point of view, but I guess I’m a little confused here: Austrians don’t believe in the multiplier effect? Really? Or is it that they don’t believe in the formula that is being used to calculate it?

    I’ll have to dig a little deeper on this one…

    Peace be with you.

  4. Keynesianism works very well if it makes unlimited warfare, wasteful as it is, possible. The biggest problem is that which Keynes himself noted in the late 1930s, and that is the elite, the rich, they are unwilling to spend money on things that are helpful to ordinary people in order to create demand in the economy, but they would be very pleased to spend the money on war in order to create demand in the economy. In the end, the rich more often than not call the shots, particularly as they are getting much wealthier compared to anyone else. Money is power and power is a zero sum game. When the rich get a lot richer while everyone else barely advances, it is not enough to say that everyone else is slightly better off, when it comes to power, they are much worse off.

  5. Good start from that statement or theory is true, but then my question is USA was at war in Iraq for 10 years and continues to Afghanistan, that should not be a surplus as having Chinese or greater.

  6. At some point the stimulus produces limited returns and that many distortions in the market that the returns from government stimulus are reduced past the point of usefulness and we have to have a massive correction. That is where we are now, and that is why the recovery isn't going to happen like people think it is. We're in this Japanese style, decades of stagnation and low growth in a broken economic sociopolitical model.

  7. Is military spending ever stimulative in the sense of creating jobs that do not require additional and ongoing government spending, i.e. stimulating independent growth of the economy? Or is it ultimately all money down a rat-hole (notwithstanding that its deployment may preserve the physical survival of the economy in an emergency)? I am not aware of any private, fee-for-service, profit-making spinoff from any program involving "defense" spending…

  12. hat communities divert law enforcement resources from violent crimes to illegal drug offenses, the risk of punishment for engaging i

  14. e money in running a government section whose most important job is taking your call when you get drunk in Riyadh. You don't get a great job at an influence mill with that on your résumé. You do if Ambassador to Saudi Arabia means what doing the "important work" needed under current policies. "We have to

  15. asdasdb at an influence mill with that on your résumé. You do if Ambassador to Saudi Arabia means what doing the "important work" needed under current policies. "We have to

  16. whose most important job is taking your call when you get drunk in Riyadh. You don't get a great job at an influence mill with that on your résumé. You do if Ambassador to Saudi Arabia means what doing the "important work

  19. You're so right. I'm there with you. Your blog is definitely worth a read if anyone comes across it. I'm lucky I did because now I've got a whole new view of this.

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