6 ms·

> There is no pot of money in between that defines limits or possibilities. We should by all means spend time thinking about what it would be good to spend $ 5

by gHosts 5y ago

> There is no pot of money in between that defines limits or possibilities. We should by all means spend time thinking about what it would be good to spend $ 5 trillion on, but given the available resources and the amount of slack at our disposal that is a case to be made independent of the spending on the war. Bollocks. The amount of productivity of each worker and the primary productivity of the land is finite. That is The Pot. Anything that drains that pot results in a poorer country.

nightski 5y ago
Historically defense spending has been decreasing as a % of GDP. It's as low as ~3.5% now, near the lowest it has ever been.
- IncRnd 5y ago
  That's a percentage of GDP, but the actual military budget per year hasn't been decreasing like that. It's increased every year since 2003. See this table: Military Spending History [1] [1] https://www.thebalance.com/u-s-military-budget-components-challenges-growth-3306320 https://www.thebalance.com/u-s-military-budget-components-ch...
  - nightski 5y ago
    I mean that chart shows it basically increasing on par with inflation, especially in the 2011-2021 decade. Why would you expect it to stay the same or decrease as our economic value grows?
    - IncRnd 5y ago
      That is not what it shows. The overall cumulative price change from 2003 to 2021 is just shy of 50%, yet the Military Spending went from $437B to $934B. Taking a smaller portion to support a desired statitical result is not scientific.
      - nightski 5y ago
        It's about 4.5% annualized increase over the 20 years (being almost flat in the second half). Yes, slightly higher than inflation (around 2.5% or so annualized), but I mean come on, it's not that large. As I pointed out, it's been decreasing as a % of GDP which is a more relevant metric.
- dragonwriter 5y ago
  > Historically defense spending has been decreasing as a % of GDP. It's as low as ~3.5% now, near the lowest it has ever been. The lowest peak year of total defense (not just war) spending during a war appears to be 1.5% of GDP in 1899 during the Spanish-American War [0]. 3.5% of GDP is nowhere near the lowest total defense spending has ever been. [0] https://www.mtholyoke.edu/acad/intrel/afp/warcosts.htm https://www.mtholyoke.edu/acad/intrel/afp/warcosts.htm
  - deleted 5y ago
    [deleted]
- VictorPath 5y ago
  First, you're calling the invasion of Iraq, the bombing of Iran, and all the other things the US has been doing around the world since as far as can be remembered "defense". Murdering villagers in remote Vietnamese villages etc. Secondly, military spending is more than 3.5% GDP. It is only 3.5% if you exclude pension and health benefits due to retired military, interest on past military spending (past as in, last year's) and so on. The real military budget is always underreported to a large extent.
  - deleted 5y ago
    [deleted]
nostromo 5y ago
It's really difficult to argue with a die-hard Keynesian because no amount of spending will ever be too much. It's the new form of trickle-down economics... "Let's print $5T and hand it to defense contractors... eventually we'll all be better off!" There are definitely forms of mal-investment by government. With $5T we could have built high speed rail and fixed our bridges and airports and still have money left over for a moonshot, like, I don't know, sending humans to mars. Instead we bought nothing and thousands of people are dead.
- deleted 5y ago
  [deleted]
- bopbeepboop 5y ago
  That’s not true — we bought the spy equipment the state uses to oppress citizens with warrantless surveillance.
- wonnage 5y ago
  That's the fallacy the article is trying to combat. The war in Afghanistan did not take away from our capacity to build infrastructure at home. It's not like all the construction capacity in America was busy building stuff for Afghanistan. > The real limit on government spending was not some artificial debt ceiling, or the risk of “running out of money”, but the productive capacity of the economy and the risk of sparking either inflation, or a ruinous multiplication of bottlenecks and dysfunctional backlogs of unmet orders. As Keynes said, we can afford anything we can actually do. But the discourse about the war (as in your comment) focuses entirely on all the things we could've done with that money, as though building bridges vs bombing people was a binary decision. It's not. We didn't spend $5T on war and leave our infrastructure crumbling because the war crowded out our capacity to build; we simply have decided, through our politics, not to bother with the latter. The irony is that MMT has been perceived as a progressive theory to encourage spending on social programs. But progressives are arguing against war using the same austerity economics that conservatives use to justify not spending on said programs. Meanwhile, nothing about MMT is actually left or right; in practice the military-industrial complex in our government is evidence that MMT works.
082349872349872 5y ago
what role do resources such as oil play in your Pot?
- lostlogin 5y ago
  Why do you mean? Are you suggesting that the trillions spent needed oil or oil security or something?
  - dylan604 5y ago
    Just guessing that they meant that most of the recent "skirmishes" have been in areas ripe with oil when similar if not worse things are occurring in other countries that we do not respond with military action.
  - 082349872349872 5y ago
    Thinking of the second world war (via Keynes): the Nazis attempted to increase their Pot (note that the comment's Pot is denominated in people and land, not in money, so I believe TFA agrees more with The Pot Theory than the Pot comment thinks it does) by capturing oil-rich areas, but fortunately for us, were stopped at Stalingrad. Had they succeeded, they'd have had the resources to keep expanding, but as it was, they discovered: no oil, no blitz.
    - lostlogin 5y ago
      They would have been stopped. The industry of Britain and Empire alone rivalled or exceeded Nazi German. With Russia and USA the allies utterly dominated Germany economically. The real quandary is how Britain did so poorly.
- AnimalMuppet 5y ago
  If we had seized their oil, then it might have played a big one. Since we didn't, it plays none at all.
danuker 5y ago
In support of this comment, the US has a record trade deficit. This means it sent quite a few dollars overseas. https://tradingeconomics.com/united-states/balance-of-trade https://tradingeconomics.com/united-states/balance-of-trade
- xxpor 5y ago
  And then what do people do with all of those dollars they just received? They buy US Treasury bonds. Or oil.
dragonwriter 5y ago
> The amount of productivity of each worker and the primary productivity of the land is finite. > That is The Pot. It's not a pot, its a stream; using the available flow isn't draining it (some uses, in fact, increase the future flow.) There are tradeoffs at the limit between present realized value and future flow rate, but most of the time the actual value is inside rather than at the boundary of the possibilities curve, so you its possible to improve one value without a trade-off in the other (unfortunately, the effects on either axis of an action aren't unambiguously predictable, either, so there is often room for reasonable disagreement about the merits of particular courses of action.)
- throwawaygh 5y ago
  >> That is The Pot. > It's not a pot, its a stream; using the available flow isn't draining it WRT PAYGO style government spending this is perfectly accurate. WRT debt-financed spending it's closer to correct than "The Pot" but still off (spending now doesn't drain the stream, but does reduce future flow for a fixed period of time). WRT a massive war it distracts from the enormous second and third order effects.
  - dragonwriter 5y ago
    You are confusing the fiction of the fisc (a finite purse for government spending which must ve filled by raising revenue or issuing debt to enable spending) in a fiat-money economy with the reality of underlying production. The mechanism by which government accounts for its direction of the use of some portion of productive capacity, and particularly the choice of one or another game to simulate the operation of pre-fiat-money government financing (where the fisc was a real thing, if even then not the whole of the ability of the government to direct the use of productive capacity), does not alter the effect the use of resources has on productive capacity. It may affect the artificial future constraints on the government so long as it chooses to play the same (or any) game to maintain the fiction of the fisc, but that's not a real constraint even on the government, much less the actual productive capacity of the economy.
klelatti 5y ago
If the economy is operating at full capacity. Clearly not the case that the US economy was operating at full capacity over this period.

by gHosts 5y ago

nightski 5y ago

Historically defense spending has been decreasing as a % of GDP. It's as low as ~3.5% now, near the lowest it has ever been.

IncRnd 5y ago
That's a percentage of GDP, but the actual military budget per year hasn't been decreasing like that. It's increased every year since 2003. See this table: Military Spending History [1] [1] https://www.thebalance.com/u-s-military-budget-components-challenges-growth-3306320 https://www.thebalance.com/u-s-military-budget-components-ch...
- nightski 5y ago
  I mean that chart shows it basically increasing on par with inflation, especially in the 2011-2021 decade. Why would you expect it to stay the same or decrease as our economic value grows?
  - IncRnd 5y ago
    That is not what it shows. The overall cumulative price change from 2003 to 2021 is just shy of 50%, yet the Military Spending went from $437B to $934B. Taking a smaller portion to support a desired statitical result is not scientific.
    - nightski 5y ago
      It's about 4.5% annualized increase over the 20 years (being almost flat in the second half). Yes, slightly higher than inflation (around 2.5% or so annualized), but I mean come on, it's not that large. As I pointed out, it's been decreasing as a % of GDP which is a more relevant metric.
dragonwriter 5y ago
> Historically defense spending has been decreasing as a % of GDP. It's as low as ~3.5% now, near the lowest it has ever been. The lowest peak year of total defense (not just war) spending during a war appears to be 1.5% of GDP in 1899 during the Spanish-American War [0]. 3.5% of GDP is nowhere near the lowest total defense spending has ever been. [0] https://www.mtholyoke.edu/acad/intrel/afp/warcosts.htm https://www.mtholyoke.edu/acad/intrel/afp/warcosts.htm
- deleted 5y ago
  [deleted]
VictorPath 5y ago
First, you're calling the invasion of Iraq, the bombing of Iran, and all the other things the US has been doing around the world since as far as can be remembered "defense". Murdering villagers in remote Vietnamese villages etc. Secondly, military spending is more than 3.5% GDP. It is only 3.5% if you exclude pension and health benefits due to retired military, interest on past military spending (past as in, last year's) and so on. The real military budget is always underreported to a large extent.
- deleted 5y ago
  [deleted]

nostromo 5y ago

It's really difficult to argue with a die-hard Keynesian because no amount of spending will ever be too much. It's the new form of trickle-down economics... "Let's print $5T and hand it to defense contractors... eventually we'll all be better off!" There are definitely forms of mal-investment by government. With $5T we could have built high speed rail and fixed our bridges and airports and still have money left over for a moonshot, like, I don't know, sending humans to mars. Instead we bought nothing and thousands of people are dead.

deleted 5y ago
[deleted]
bopbeepboop 5y ago
That’s not true — we bought the spy equipment the state uses to oppress citizens with warrantless surveillance.
wonnage 5y ago
That's the fallacy the article is trying to combat. The war in Afghanistan did not take away from our capacity to build infrastructure at home. It's not like all the construction capacity in America was busy building stuff for Afghanistan. > The real limit on government spending was not some artificial debt ceiling, or the risk of “running out of money”, but the productive capacity of the economy and the risk of sparking either inflation, or a ruinous multiplication of bottlenecks and dysfunctional backlogs of unmet orders. As Keynes said, we can afford anything we can actually do. But the discourse about the war (as in your comment) focuses entirely on all the things we could've done with that money, as though building bridges vs bombing people was a binary decision. It's not. We didn't spend $5T on war and leave our infrastructure crumbling because the war crowded out our capacity to build; we simply have decided, through our politics, not to bother with the latter. The irony is that MMT has been perceived as a progressive theory to encourage spending on social programs. But progressives are arguing against war using the same austerity economics that conservatives use to justify not spending on said programs. Meanwhile, nothing about MMT is actually left or right; in practice the military-industrial complex in our government is evidence that MMT works.

082349872349872 5y ago

what role do resources such as oil play in your Pot?

lostlogin 5y ago
Why do you mean? Are you suggesting that the trillions spent needed oil or oil security or something?
- dylan604 5y ago
  Just guessing that they meant that most of the recent "skirmishes" have been in areas ripe with oil when similar if not worse things are occurring in other countries that we do not respond with military action.
- 082349872349872 5y ago
  Thinking of the second world war (via Keynes): the Nazis attempted to increase their Pot (note that the comment's Pot is denominated in people and land, not in money, so I believe TFA agrees more with The Pot Theory than the Pot comment thinks it does) by capturing oil-rich areas, but fortunately for us, were stopped at Stalingrad. Had they succeeded, they'd have had the resources to keep expanding, but as it was, they discovered: no oil, no blitz.
  - lostlogin 5y ago
    They would have been stopped. The industry of Britain and Empire alone rivalled or exceeded Nazi German. With Russia and USA the allies utterly dominated Germany economically. The real quandary is how Britain did so poorly.
AnimalMuppet 5y ago
If we had seized their oil, then it might have played a big one. Since we didn't, it plays none at all.

danuker 5y ago

In support of this comment, the US has a record trade deficit. This means it sent quite a few dollars overseas. https://tradingeconomics.com/united-states/balance-of-trade https://tradingeconomics.com/united-states/balance-of-trade

xxpor 5y ago
And then what do people do with all of those dollars they just received? They buy US Treasury bonds. Or oil.

dragonwriter 5y ago

> The amount of productivity of each worker and the primary productivity of the land is finite. > That is The Pot. It's not a pot, its a stream; using the available flow isn't draining it (some uses, in fact, increase the future flow.) There are tradeoffs at the limit between present realized value and future flow rate, but most of the time the actual value is inside rather than at the boundary of the possibilities curve, so you its possible to improve one value without a trade-off in the other (unfortunately, the effects on either axis of an action aren't unambiguously predictable, either, so there is often room for reasonable disagreement about the merits of particular courses of action.)

throwawaygh 5y ago
>> That is The Pot. > It's not a pot, its a stream; using the available flow isn't draining it WRT PAYGO style government spending this is perfectly accurate. WRT debt-financed spending it's closer to correct than "The Pot" but still off (spending now doesn't drain the stream, but does reduce future flow for a fixed period of time). WRT a massive war it distracts from the enormous second and third order effects.
- dragonwriter 5y ago
  You are confusing the fiction of the fisc (a finite purse for government spending which must ve filled by raising revenue or issuing debt to enable spending) in a fiat-money economy with the reality of underlying production. The mechanism by which government accounts for its direction of the use of some portion of productive capacity, and particularly the choice of one or another game to simulate the operation of pre-fiat-money government financing (where the fisc was a real thing, if even then not the whole of the ability of the government to direct the use of productive capacity), does not alter the effect the use of resources has on productive capacity. It may affect the artificial future constraints on the government so long as it chooses to play the same (or any) game to maintain the fiction of the fisc, but that's not a real constraint even on the government, much less the actual productive capacity of the economy.

klelatti 5y ago

If the economy is operating at full capacity. Clearly not the case that the US economy was operating at full capacity over this period.