Military Keynesians
More fundamentally, Fuller’s analysis fails to consider the impact that massive, ongoing Pentagon spending has on the economy. In a forthcoming paper to be published in The Review of Austrian Economics, George Mason University economists Chris Coyne and Thomas Duncan argue that the permanent war economy—military spending now consumes roughly 20 percent of our budget, at a cost of over $700 billion including war spending—draws resources into the military sector at the expense of the private economy, even in times of peace. They find that the huge defense budget undermines market processes and decreases our standard of living.
Academic studies corroborate the claim that government spending can reduce private-sector activity. A 2011 National Bureau of Economic Research (NBER) working paper by Lauren Cohen, Joshua Coval, and Christopher Malloy of the Harvard Business School finds that federal spending causes local businesses to scale back their employment, which causes declines in sales rather than growth. In other words, when government spending grows, the private sector shrinks as normal economic activity is crowded out.
Blowback
Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.
Trackbacks/Pings
Trackback URL
Comments
The party of limited government, except when it’s not.
Free Constitution on November 20, 2012 at 9:13 PM
There is only a few things the govt. is required to do, a military is one of them.
LincolntheHun on November 20, 2012 at 9:17 PM
What a load of rubbish.
The primary duty, the prime responsibility of ANY government, is to protect the nation.
This nation spends more on Social Security than it does on the military.
This nation spends more on medicare than it does on the military.
This nation spends more on welfare than it does on the military.
More than 60% of our national budget goes towards three entitlement programs of dubious constitutionality, programs that should be abolished and their function taken over by private enterprise and personal responsibility.
TKindred on November 20, 2012 at 9:32 PM
You’re stoopid. Just saying it with emphasis.
Thomas More on November 20, 2012 at 9:35 PM
The Post Office is another one of them. I do not, however, see us spending $700 billion/year on delivering the mail…
JohnGalt23 on November 20, 2012 at 9:36 PM
By all means, train the Militia! Issue M14′s to male Citizens. After all, any sane Government would have long ago cleaned out paramilitary organizations like the Black Panthers, Nation of Islam, La Raza, drug street gangs, MS-13, etc. who have “no go turf” and please; seal the southern border against illegal aliens so that real Americans can get jobs. Kick out all 11 million of them or tax them so much that they leave. “You name is Plablo Hemaninez? You don’t have any I.D.? Fine, we tax you at 95%. Have a nice day.”
But bringing religiosity to the fuzzy wuzzy Islamist or maintaining 150 bases around the world is insane. By all means, develop the F-22 and the F-35, but then don’t sell F-15′s to the Turks and the Libyans and then complain that we are “outclassed” militarily.
Bulletchaser on November 20, 2012 at 9:37 PM
This is such a red herring. Yes we spend too much on entitlements AND “defense”. Is it possible to be against wasteful/unnecessary spending regardless of who the money is spent on. We agree that too much is spent on entitlements. Now may we have a discussion about the tremendous waste at DoD?
iwasbornwithit on November 20, 2012 at 9:57 PM
By all means, we should be a nation of riflemen. EVERY high school senior should be able to demonstrate proficiency in marksmanship as a condition of graduation.
We have a rather large military trained to fight and win in an arid environment. Let’s pull them all out of the middle east, and deploy them along our southern border. Then start rounding up the illegals and sending them across to Mexico for to deal with.
TKindred on November 20, 2012 at 9:59 PM
Wrong.
If you want to cut down excessive spending at DoD, then start with Congress because THAT is the source of the problem. Congress stipulates how contracts are let, and in their zeal to protect the taxpayer’s money, they go overboard with contract demands.
The Navy doesn’t have near the money it needs for both shipbuilding and manning, yet it is being asked to do more with less. One partial solution is to strip away all of the programs put in place by the “Diversity Industry”. Did you know that the US Navy has an entire command located at Milington, TN, devoted to diversity programs? Yup. An entire frikkin’ command doing nothing but ginning up ideas for “Hispanic Awareness month” training, “African-American Engineering Officer of the year” awards, and other such falderal.
It is so bad that actual warfighting training is impacted by demands that ship’s company undergo all sorts of sexual awareness training, diversity training, etc. Money that should be going to increasing manning levels, increasing maintenance and other readiness programs is instead being sucked down this giant black hole of political correctness.
We don’t need to cut monies from DoD. We need to reprioritize those funds, and direct them to actual warfighting & training purposes.
TKindred on November 20, 2012 at 10:07 PM
The constitution doesn’t call for an exponential growth of the defense budget though.
Hypocrite, big government, RINOs are the reason the right can’t be trusted to actually shrink government.
rndmusrnm on November 20, 2012 at 10:13 PM
As I understand it, the Keynesian method was supposed to be counter-cyclical in bad times and good.
Marsili.us on November 20, 2012 at 10:51 PM
Military Keynesians… not to be confused with militant Keynsians, who march FORWARD(!™) undauntedly into the economic abyss.
Glenn Jericho on November 20, 2012 at 11:12 PM
Military spending is direct government monies going toward actual concrete products and services that are put to use, which is vastly different from the way that the typical Keynesian argument goes about the way government impacts the markets through spending. That is in addition to that the spending is directly called for in the constitution.
NeoconNews.com on November 21, 2012 at 2:23 AM
Exactly. Even though the military is expensive, at least we get something tangible in return, like ships, missiles, and C-17s. Not that we couldn’t trim a lot of waste.
When we pay farmers not to grow crops, pay cash for clunkers, “invest” in Solyndras and GMs, subsidize wind farms, and on and on, it’s also expensive, plus we get less than nothing in return.
ZenDraken on November 21, 2012 at 2:39 AM
Every year we get the same 3rd grade analysis of our government by liberals. The authors of the “study” cited by De Rugy are long on finger pointing, short of specifics. Download the PDF over the internet, ya know the one created by the DoD (not Gore).
What this country needs is an honest look at the roles and missions of the military. Not liberal talking points. We don’t need to hear from those who choose to ignore the wars brewing all over the world. It’s a shame that Reason magazine chose to run with a report so stupid.
Chockblock on November 21, 2012 at 3:26 AM
Ahh, but there’s a difference: Congress may set up post offices; Congress must provide for the national defense.
Years ago, the Navy wanted to close a base it felt was no longer necessary. The Congressman in whose district it sat forced them to keep it open. Even when the DoD wants to cut, we won’t allow it. That is the problem.
Odysseus on November 21, 2012 at 7:00 AM
And how do ships, missiles, and C-17s improve your life? Better yet, do these weapons of death provide more improvement to your life than the goods and services that could have been produced if the money wasn’t spent on the military?
antifederalist on November 21, 2012 at 8:02 AM
Ahh, but there’s a difference: Congress may set up post offices; Congress must provide for the national defense.
Odysseus on November 21, 2012 at 7:00 AM
antifederalist on November 21, 2012 at 8:08 AM
So, in your opinion, should there be an open ended blank check for military spend? Because the Congress is authorized to provide a defense, is any and all military spending justified? If so, why not have $1.5T or $3T of military spending per year?
antifederalist on November 21, 2012 at 8:09 AM