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News Could Significantly Upping Defense Spending Help the Economy Recover?

  1. Jul 1, 2010 #1
    So I've been thinking, many on the left say we need massive economic fiscal stimulus to recover the economy. They say the reason fiscal stimulus hasn't worked in the past is not enough money spent.

    However, they say WWII represents a time when the nation finally did spend the massive amount needed. Also the Reagan recovery. I know Republicans point to things like Reagan's tax cuts and deregulation, but Reagan also upped defense spending significantly. So could Reagan inadverdently have given a Keynesian-style economic push to the U.S. economy as well?

    One thing I have been reading on military forums (I do not have any official source on this however) is that a major problem with the U.S. military's vehicles, such as Humvees for example, is that:

    1) They were never meant to be driven the distances they have been used in Iraq and Afghanistan

    2) They were never meant to be fitted with all that armor they have tacked onto them, which strains the engines and transmissions and causes blown transmissions, parts wear out far faster, etc...basically a lot of the military's equipment, or at least the Army and the Marine Corps's, is getting very worn out far faster than was ever intended.

    Now Paul Krugman wrote an article in the New York Times (http://www.nytimes.com/glogin?URI=h...Q2AQ5DWQ5EQ5DQ3EXdKdQ3EKQ5DWQ5E5GAEkCK@Q23Hko - you'll need an account there to read it though), discussing how he thinks we are on the verge of another depression, and that the worst thing to do now is cut spending, and he laments that is what Europe wants and what seems will start happening in America.

    He says that yes, Greece is a major example of what happens with long-term deficits and debts, but in times of economic crisis, short-term deficit spending is good.

    So my question is, would not upping defense spending a good deal be perfect for this scenario? Think about it:

    1) It seems to have really worked at creating jobs in the past (WWII, Ronald Reagan)

    2) Assuming the military's vehicles are worn out, the military, in particular the Army and Marine Corps, could really use it to a degree (new vehicles, like Humvees).

    3) It would be short-term. Unlike stimulus spending that goes into bloated state bureaucracies or feeding demands of public employees unions or entitlement programs certain people in government want to create (which are impossible to end once began), you spend a bunch of money to replace worn out military hardware with brand-new military hardware, and then once done, you have no problem drawing down spending.

    I am sure you'd have to fight to even sustain it for the length one might feel is needed. You just make sure the new vehicles will not require any substantially higher defense budget once replaced (if anything, if they have new parts that are easier to maintain, the budget might be able to be a bit less).

    But for example if building the Air Force all the F-22s it wants would mean a substantially higher budget for the Air Force to maintain the F-22s, then one would probably need to be careful there I'd think (I have no clue if the F-22 is cheaper or more expensive to maintain then the F-16s and F-15s).

    So such deficit spending on defense would be a short-term form of deficit spending, just as the Keynesians want, according to them it has worked in the past (WWII) (I can't imagine how it would not create lots of real jobs), and the military likely needs it right now (correct me if wrong).

    What say you people?
     
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  3. Jul 1, 2010 #2

    russ_watters

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    I doubt many democrats would admit it, but if the goal is economic stimulus, defense spending is in many ways superior to the stimulus spending we just had. Here's three ways:

    First, a substantial fraction of stimulus spending on renewable energy is going to foreing companies. This link says 79%: http://www.statesman.com/business/senators-focus-on-texas-wind-farm-in-criticizing-315293.html [Broken] For defense spending, the vast majority would be domestic.

    Next, the quality of the jobs produced by defense spending is substantially higher than in many forms of stimulus spending such as road work. Those funds paid for an extremely large increase in extremely low-end jobs that workers are overpaid for, for a very short time. It's just fluff - spending for the sake of spending with no long-term benefit for the workers. Defense spending creates high-end jobs with long-term needs.

    And third, defense spending helps buoy our beleagured industrial base.

    All that said, I'd still prefer no stimulus over defense-based stimulus.
     
    Last edited by a moderator: May 4, 2017
  4. Jul 1, 2010 #3

    Office_Shredder

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    How many shot-in-arms does it take before we really have an economic IV?
     
  5. Jul 1, 2010 #4
    russ, When you say defense spending creates high-end jobs with long-term needs, do you mean in that after the defense spending gets scaled back down, those people then can leave the defense industry and go into other technology industries that will need those skills? Whereas with something like roadwork, once done, the labor can't find other jobs because it is fairly low-skilled work?
     
  6. Jul 1, 2010 #5
    Uh... How about spending it on something useful instead? Stem cell research? Waste handling? Recycling? Renewable energy? God forbid, health care?

    I mean, in the end, the idea must be to encourage production of something useful, right?
     
  7. Jul 1, 2010 #6
    Not answering for Russ.

    Myself, having been in the construction industry and now being involved in the defense industry (as well as commercial), I'd say absolutely. Having experience in military contracts requires a higher skillset due to higher standards of manufacturing that is transferable to positions in commercial industries that pay more than construction industries.
     
  8. Jul 1, 2010 #7
    The idea is to create jobs on a large scale, I don't think that would quite do it.

    How will spending money on waste-handling or recycling stimulate the economy?

    The technology doesn't exist yet.

    It's to be temporary spending, healthcare is permanent spending. Also, healthcare spending isn't going to create jobs as I see it. Finally, people could afford to buy their own healthcare fine if government would apply some of the means to fix the private-sector healthcare system I'd think.

    How is providing for the national defense not useful?
     
  9. Jul 1, 2010 #8

    apeiron

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    Hah, the DoD healthcare budget is $50 billion and rising - about a tenth its base budget.

    But you are right about the crazy thought processes here. The US already spends nearly as much as the rest of the world combined on military stuff (43%) and over six times its closest rival, China. So what the US really needs is more guns rather than better schools, better childcare, better all the other things that make the future worth caring about.
     
  10. Jul 1, 2010 #9
    I don't think debates work that way. You need to prove how it IS useful, because it's not readily apparent.

    The United States already spends a tremendous amount of money on the military. Nearly as much as the entire rest of the world combined.

    I argue that the law of diminishing returns applies to military spending. Now, it's your turn to explain how that extra money IS useful. You've mentioned replacing the Humvees, but that won't be "significantly upping defense spending." In fact, you could replace the Humvees and simultaneously DECREASE defense spending by cutting out waste, closing down bases, and taking a less aggressive posture in the world.

    I think the list was intended to include all of the items in the list, not just one. You picked out one and said "doing this alone won't quite do it." However, that's a straw man, the poster never said "do stem cell research and nothing but."

    In the same EXACT manner military spending would. It creates jobs.

    Nuclear energy doesn't exist yet? Solar power doesn't exist yet? Wind energy doesn't exist yet? Can you please explain what you meant by "the technology doesn't exist yet?"
     
  11. Jul 1, 2010 #10
    You've got the right idea. But who is doing the spending of whos labors and who gets the the stuff they want? You're items are not high on anyone's list for personal economic improvement beyond those who are selling these particular goods.

    I see voodoo economics from the right and the left of the political spectrum here, as if daddy DC know better than I do what is best for my enhanced economic well-being.
     
    Last edited: Jul 1, 2010
  12. Jul 1, 2010 #11
    Well, what does the US need? I doubt it's food. Education? Sure. But not more guns.
     
  13. Jul 1, 2010 #12
    Education?? Education is a leverage over others competing for goods. In and of itself it has no value. And the majority is garbage.

    Now, "guns" have value. Russ calls it defense. The value for individuals within the US is not though defense (The Canadians will not be invading anytime soon.), but through both economic intimidation and military conquest of resources. Not a very altuistic answer, but there is it.
     
  14. Jul 1, 2010 #13

    russ_watters

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    I'll give an example: I've heard that keeping up a skilled workforce and capacity is a significant problem for an aerospace company. So if the govt buys C-17s during a time when 747 orders are down, it enables Boeing to keep its skilled workfore, save downsizing/hiring/retraining costs, prevents them from having to mothball and reopen a factory and provides profit they can use to keep developing the 787.

    A flagger on a paving project doesn't need training so
    he can be rehired whenever, but stimulus funding isn't bridging a gap, it is creating a unique need that is gone once the stimulus has ended. And at least with Boeing of the 787 is a flop, those workers are positioned well for other manufacturing jobs. A flagger on a road crew has gained only money.
     
  15. Jul 1, 2010 #14

    russ_watters

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    Also - the question of whether military spending is or isn't a good idea in the geopolitical sense isn't relevant to whether it provides a good stimulus benefit.
     
  16. Jul 1, 2010 #15
    It is, however, relevant to whether upping defense spending would be a good idea. You can't ignore an aspect just because it works against you.
     
  17. Jul 1, 2010 #16

    russ_watters

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    Another area of defense spending that would dovetail nicely with stimulus goals is construction. Many of the military facilities I've seen are in dismal shape and upgrading or replacing them could reduce energy, improve living conditions and provide a bridge for construction companies until the market comes back.

    Btw, it is called "defense" spending because that's the name of the department.
     
  18. Jul 1, 2010 #17
    It is useful in that it provides the nation with the ability to defend itself, maintain global order, keep the sea lanes open, project force (like if you need to invade a country), and send aid to where it is needed in times of crises around the world.

    It isn't so much that the U.S. spends so much as everyone else spends so little and we carry much of the burden.

    Humvee fleet, F-22s, tanks, etc...I don't know exactly what to spend it on, the basis of my question was simply whether upping defense spending for replacing legitimate hardware is needed. I'm not talking about upping it for various pie-in-the-sky proects that would take years, the idea for stimulus is you can draw down the defense spending again after awhile.

    For that part, I intentionally meant only stem cell research. I do not see how stem cell research will create jobs to grow the economy.

    In what manner? What technical skills or manufacturing are needed for waste-handling or recycling that compare with what defense spending entails? Not understanding here :confused:

    I meant no viable alternative exists yet.

    Nuclear energy is not going to create any immediate jobs. You run into all sorts of rules, laws, regulations, etc...just to build a nuclear plant. It takes years (over a decade I think) to get a nuclear plant constructed.

    As for solar power, wind power, etc...those are technologies that are not viable right now. They only exist to the degree that they do due to heavy subsidies and make up a tiny fraction of the power base. Plus wind turbines kill birds. You aren't going to create any significant number of jobs with these technologies, they will not make much of any dent on the nation's power supply, and if anything you'd have to force them on people who do not want them.
     
    Last edited: Jul 1, 2010
  19. Jul 1, 2010 #18
    Of course we should and will spend on defense what is necessary. What I understand you to mean is that we should spend more on defense than necessary. This works so well for the North Koreans, why not for the US.
     
  20. Jul 1, 2010 #19
    I agree on construction being helpful, but wouldn't construction be very similar to if we also created a bunch of infrastructure projects? Japan did a lot of infrastructure work, but it didn't seem to stimulate their economy much.
     
  21. Jul 1, 2010 #20
    No no, I am saying we should spend more on defense (or certain areas of defense) because it is probably necessary anyhow due to the wars, which have led to the vehicle fleets and equipment being used up far more than they were intended to. Also the Air Force's aircraft fleet is aging.

    So if it would provide good stimulus for the economy, why not do things like build a lot of the F-22s the Air Force wants, replace the Marine Corps M1A1 Abrams tanks with the newer M1A2s, replace the entire Humvee fleet with brand-new Humvees, replace the current gas-turbine in the Abrams tanks in both the Army and Marine Corps with the smaller, newer design gas turbine that has been offered for years, build new aircraft for the Navy where it needs them, any other types of vehicles the Army and Marines need, build them new ones if needed, build the Coast Guard a bunch of new boats and ships as they use some really old equipment, etc...basically burn a bunch of money on building all this hardware, create a bunch of jobs in the process, and then once complete, you (theoretically) have stimulated the economy and you can now draw down the spending back to the levels previously.

    You only had to up spending to build/buy the new hardware, but once the military has said hardware, it's back to the usual budget to use and maintain what they have.
     
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