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A military base buys labor, technology, services, raw resources and produces defense/security. You're conflating what the military base spends with what it prod
by alexbeloi 9y ago
A military base buys labor, technology, services, raw resources and produces defense/security. You're conflating what the military base spends with what it produces. (the point of the argument against GDP)
Just because I spend money on something, does not mean that I produce that thing, even if my spending increases demand for said good. That results in double counting production, which was already counted once by the seller.
- ithkuil 9y agoBut what if it's mostly domestic spending? The money spent for salaries flows in whatever those individuals need/desire to spend (groceries, barber shop, you name it). The part of the trillion dollar injected in any economic activity in a closed system stays in that system. (The part of that sum that is used to buy imports is another thing, although I guess it's far more complicated to properly account for) Honestly, every time I think about this my mind just melts; I'll be really glad if somebody can clearly explain where is the catch.
- mywittyname 9y agoMilitary spending also creates new technologies and improves economic productivity. Thus, it drives growth in the economy, not just through direct purchasing and salaries, but also by making traditional investments. I'm not focusing on what is produced (in fact, I made an explicit statement to this effect), but on investments made that drive productivity growth (which is considered the most direct driver of economic growth). And if those investments made earn more than the costs of interest on the debt, then it's a net win for society.