2 ms·
> You build a bomb, you blow up the bomb, that’s money that’s just gone for good. The bomb is gone, the money isn't. It's still circulating, because the people
by vkou 4y ago
> You build a bomb, you blow up the bomb, that’s money that’s just gone for good.
The bomb is gone, the money isn't. It's still circulating, because the people working for the defense contractors who built the bomb got paid.
The money was also created by the government borrowing it (As the war was financed by deficits). In our current financial system, loans expand the money supply.
There's no significant difference in the impact on the economy between paying defense contractors money to build a bomb that you then explode, and paying them to sit around and pick their nose.
- UncleEntity 4y agoYep, that’s what’s called the broken window fallacy.