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The United States economy is based upon Military Keynesianism. The federal government does not analyze spending the same way we do because __spending benefits

The United States economy is based upon Military Keynesianism. The federal government does not analyze spending the same way we do because __spending benefits the economy__, which is part of the government's responsibility. They intentionally spend money to stimulate the economy. So when the military spends $1 trillion on planes, they are really trading $1 trillion for planes plus economic stimulus. In other words, the planes don't literally cost $1 trillion. Rather the cost of the planes = $1 trillion minus the economic benefit of spending. http://en.wikipedia.org/wiki/Military_Keynesianism http://en.wikipedia.org/wiki/Military_Keynesianism

sshconnection 13y ago
Not all spending is equal. If they want to pour money into projects, there is plenty of infrastructure that needs to be built here.
- mikegagnon 13y ago
  I agree. I think Military Keynesianism is a bad economic policy. I have seen lots of articles that discuss wasteful DoD spending. But I see very few that discuss __why__ the DoD spends money this way. And why it continues. This type of spending is not a new phenomenon. To me these "why" questions are the most important and intellectually interesting aspects of these issues. But they are often ignored.
- michaelt 13y ago
  Ah, but you forget the myriad other benefits: 1. If you don't believe in globalization, you can legitimately lock out foreign competition and insist on an all-American supply chain, keeping jobs and money in the US. 2. It allows you to bring home the pork. Military contractors have a proven willingness to situate assembly plants to deliver jobs in politically convenient locations. 3. It's compatible with Libertarian/Tea Party beliefs, as military spending tends to get a free pass from the balanced budget brigade. 4. People will call you "a hawk" and "strong on defense" and "supporting our troops". Or at least they won't call you the opposite of those things. 5. Spending on things like DARPA funds cool things like the internet and the DARPA Grand Challenge and robots and things. Pretty sciencey and cool. 6. $60 million in lobbying in 2012 https://www.opensecrets.org/lobby/indusclient.php?id=D01&year=2012 https://www.opensecrets.org/lobby/indusclient.php?id=D01&yea... with Boeing, Northrop Grumman and Lockheed Martin all in the top 20 individual donors https://www.opensecrets.org/lobby/top.php?indexType=s&showYear=2012 https://www.opensecrets.org/lobby/top.php?indexType=s&showYe... Compare that to funding boring old schools and bridges and things which have none of these benefits.
  - shirederby 13y ago
    > 3. It's compatible with Libertarian/Tea Party beliefs, as military spending tends to get a free pass from the balanced budget brigade. Tea Party, maybe, but not libertarian. Reason, Cato, and the like are highly critical of military spending and very frequently chastise mainstream Republicans for focussing on discretionary and entitlement spending while ignoring the military spending.
jamoes 13y ago
So, if spending unilaterally stimulates the economy, then why stop at $1 trillion? Why not just spend quadrillions of dollars and really stimulate the economy? The answer is that the there is a very real opportunity cost to their spending. That trillion dollars could have been spend on other infrastructure, or education, or even a more efficient warplane, and all of those expenditures would have resulted in greater value creation. Hayek originally debunked this line of thinking in the Parable of the Broken Window: https://en.wikipedia.org/wiki/Parable_of_the_broken_window https://en.wikipedia.org/wiki/Parable_of_the_broken_window
- mikegagnon 13y ago
  There is always a debate about how much to spend and what to spend it on. I believe these issues are what primarily distinguish republicans from democrats. I agree that Military Keynesianism is not the best way for the government to stimulate the economy. That does not change the fact that it is the de facto economic policy of the United States. Here are some relevant analyses from inside and outside the Pentagon. - Spinney's "Defense Power Games" http://www.dnipogo.org/fcs/def_power_games_98.htm http://www.dnipogo.org/fcs/def_power_games_98.htm * Chomsky's - - "The Pentagon System" http://www.thirdworldtraveler.com/Chomsky/PentagonSystem_Cho.. http://www.thirdworldtraveler.com/Chomsky/PentagonSystem_Cho....
- guscost 13y ago
  Indeed there is a very real opportunity cost to having the government redistribute that trillion regardless. /libertarian
- guiomie 13y ago
  Sir, thanks for the link! I feel like I am going to bed more intelligent tonight.

sshconnection 13y ago

Not all spending is equal. If they want to pour money into projects, there is plenty of infrastructure that needs to be built here.

mikegagnon 13y ago
I agree. I think Military Keynesianism is a bad economic policy. I have seen lots of articles that discuss wasteful DoD spending. But I see very few that discuss __why__ the DoD spends money this way. And why it continues. This type of spending is not a new phenomenon. To me these "why" questions are the most important and intellectually interesting aspects of these issues. But they are often ignored.
michaelt 13y ago
Ah, but you forget the myriad other benefits: 1. If you don't believe in globalization, you can legitimately lock out foreign competition and insist on an all-American supply chain, keeping jobs and money in the US. 2. It allows you to bring home the pork. Military contractors have a proven willingness to situate assembly plants to deliver jobs in politically convenient locations. 3. It's compatible with Libertarian/Tea Party beliefs, as military spending tends to get a free pass from the balanced budget brigade. 4. People will call you "a hawk" and "strong on defense" and "supporting our troops". Or at least they won't call you the opposite of those things. 5. Spending on things like DARPA funds cool things like the internet and the DARPA Grand Challenge and robots and things. Pretty sciencey and cool. 6. $60 million in lobbying in 2012 https://www.opensecrets.org/lobby/indusclient.php?id=D01&year=2012 https://www.opensecrets.org/lobby/indusclient.php?id=D01&yea... with Boeing, Northrop Grumman and Lockheed Martin all in the top 20 individual donors https://www.opensecrets.org/lobby/top.php?indexType=s&showYear=2012 https://www.opensecrets.org/lobby/top.php?indexType=s&showYe... Compare that to funding boring old schools and bridges and things which have none of these benefits.
- shirederby 13y ago
  > 3. It's compatible with Libertarian/Tea Party beliefs, as military spending tends to get a free pass from the balanced budget brigade. Tea Party, maybe, but not libertarian. Reason, Cato, and the like are highly critical of military spending and very frequently chastise mainstream Republicans for focussing on discretionary and entitlement spending while ignoring the military spending.

jamoes 13y ago

So, if spending unilaterally stimulates the economy, then why stop at $1 trillion? Why not just spend quadrillions of dollars and really stimulate the economy? The answer is that the there is a very real opportunity cost to their spending. That trillion dollars could have been spend on other infrastructure, or education, or even a more efficient warplane, and all of those expenditures would have resulted in greater value creation. Hayek originally debunked this line of thinking in the Parable of the Broken Window: https://en.wikipedia.org/wiki/Parable_of_the_broken_window https://en.wikipedia.org/wiki/Parable_of_the_broken_window

mikegagnon 13y ago
There is always a debate about how much to spend and what to spend it on. I believe these issues are what primarily distinguish republicans from democrats. I agree that Military Keynesianism is not the best way for the government to stimulate the economy. That does not change the fact that it is the de facto economic policy of the United States. Here are some relevant analyses from inside and outside the Pentagon. - Spinney's "Defense Power Games" http://www.dnipogo.org/fcs/def_power_games_98.htm http://www.dnipogo.org/fcs/def_power_games_98.htm * Chomsky's - - "The Pentagon System" http://www.thirdworldtraveler.com/Chomsky/PentagonSystem_Cho.. http://www.thirdworldtraveler.com/Chomsky/PentagonSystem_Cho....
guscost 13y ago
Indeed there is a very real opportunity cost to having the government redistribute that trillion regardless. /libertarian
guiomie 13y ago
Sir, thanks for the link! I feel like I am going to bed more intelligent tonight.