View Full Version : The Defense Stimulus

01-15-2009, 12:54 PM

This topic isn't new (and the article is quite superficial in my opinion):








The DoD budget as a whole is dangerously inflated and needs to be cut to a level that can be financed without new debt (federal budget deficit and trade balance deficit tell me that the Bush II years budgets were obviously not sustainable).

The present - seemingly paradox- situation is that defense budgets could be used to stimulate the economy - but only to some degree. Military spending in itself is harmful for a nation's macroeconomics, and even the stimulus concept is questionable (don't trust the propaganda for stimulus).
It might be a good idea to spend earlier, though. Repairs, construction work and procurement planned for 2011-2013 could be moved into 2009-2011.
Such a shifting of expenses in time would be almost neutral tot he long-term debt situation.

We should always keep in mind that government debt can expose and weaken us militarily just as well as 'too' small military budgets can do.
I don't remember a single example of an already broke government that entered and won a major war in military history (excluding the irrelevant Third World participants of WW2).

01-15-2009, 05:56 PM
Defense spending actually isn't all that much. America spends more each year in interest on debt than we do on national defense.

We may spend more money on defense than most of the world combined, but we also spend less as a percentage of GDP than many. In fact, we are at number 28 on that particular list.

For that matter, as a nation we have been more engaged, and for longer, than any other country. You need look no farther than your own country for an example of our presence abroad.

And as to whether defense spending is an appropriate stimulus, I have to strongly disagree. Boeing and the military are economic giants in the Puget Sound, where I have spent most of my life. And Boeing just announced layoffs.

At the same time, we have a deteriorating military. Attrition has been especially bad for the Air Force. Last year a cousin of mine was lost in a plane that inexplicably fell from the sky. Two F15s have lost wings in the last year or two. And Boeing has just offered the F18 Super Hornet for $40 million. It may not be as capable as the 200 F22s that the Air Force wants to buy, but then five for the price of one isn't a bad deal.

Moreover, I'm not sure to what degree you understand American internal politics. I'm not entirely comfortable with the idea of stimulus packages either, but the fact remains that the United States needs to spend money on both infrastructure and the military. Other items that the Congress wants to spend money on, under the guise of stimulus, are food stamps (a program by which the government buys poor people food) and unemployment.

Defense and infrastructure at least offer some long term benefit.

Also, I don't think most people appreciate how the United States government spends money. The last statistics that I saw indicate that a full 60% of payments are made to individuals in the form of benefits. This is orders of magnitude more than we spend on defense.

I hope that I haven't overstepped the bounds of propriety with regards to SWJ's policy on political commentary, but this issue stands at the confluence of defense and economic policy and is too often viewed without perspective.