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The Military Spending Fairy
Faced with the prospect of cuts to the Defense Department's budget, the defense industry is pushing the story of the military spending fairy on members of Congress. They are telling them that these cuts will lead to the loss of more than 1 million jobs over the next decade.
Believers in the military spending fairy say things like "the government can't create jobs," but also think that military spending creates jobs. Under the military spending fairy story, if the government spends $1 billion dollars paying people to do research or to build items related to the civilian economy it is just a drag on the private economy; however if the same spending goes to military related purposes, then it creates jobs.
Believers in the military spending fairy say things like "the government can't create jobs," but also think that military spending creates jobs. (image: Pete Simon)
It's not clear exactly how the military fairy blesses projects to make them helpful to the economy rather than harmful. For example, the highways were built in the 50s ostensibly in part for defense purposes. They made it easier to move troops and military equipment around the country in the event of an attack. Government subsidized student loans were also originally dubbed as defense loans since they were ostensibly intended in part to produce more graduates in science and engineering who could help us compete with the Soviet Union in defense related technologies.
Using this same logic, perhaps President Obama could get the military spending fairy to bless some of his stimulus spending so that it will be economically useful. He could again call student loans "defense loans." He could also have the research into clean energy technologies be viewed as providing alternative sources for energy for the military in the event we are cut off from oil imports in a war. (It makes as much sense as the highway story.) Then the military spending fairy can bless the stimulus as creating jobs.
For people who don't believe in the military spending fairy, the story is simple. During a downturn where there are lots of unemployed workers, any government spending will create jobs, regardless of whether or not it is on the military. In fact, military spending is likely to create fewer jobs than spending in most other areas (e.g. education, health care, conservation) because it is more capital intensive.
When the economy is near full employment, military spending is a drag on the economy. It pulls resources away from private sector uses, lowering investment and increasing the trade deficit. This leads to job losses, which are likely to be felt most severely in manufacturing and construction.
In short, for those who do not believe in the military spending fairy, military spending will cost jobs in either the short-term of long-term. If the spending doesn't make sense in terms of advancing national security, then it doesn't make sense period: end of story.
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26 Comments so far
Show All"He could also have the research into clean energy technologies be viewed as providing alternative sources for energy for the military in the event we are cut off from oil imports in a war."
Sometime in the 1960s Barry Commoner noted that the cost of photovoltaic power sources could beceome economical if the Pentagon would just announce that it planned to replace all of its gasoline-powered generators with solar-powered ones. The volume involved would cause the unit price to drop so much that civilian uses would suddenly become economical.
Nothing happened then, and it is not likely to happen now. I believe the appropriate comment is "Plus ca change, plus ca meme chose."
Sheepherder, I had never heard that Barry Commoner comment before. How right he was. With all the money (our money) that has been shoveled to the military in the past 10 years -- not one god-damned good thing has come from it. Not that I am in the habit of thinking that anything good ever does come from military spending, but it seems that that's the place where innovation can be afforded. So many ways to kill people! Too bad the pentagon didn't do exactly what Commoner mused about.
"They are telling them that these cuts will lead to the loss of more than 1 million jobs over the next decade."
There are better job's than make work government jobs which are exactly what these are. How does any conservative buy this argument when they are pushing an agenda that opposes this exact thing. "Petard" anyone?
To amplify on your comment, assume for a minute that their one million job figure is accurate. And these one million jobs, then, are costing us at least Ten Trillion dollars over the same period.
Since a Trillion is a million million, that works out to a cost to the taxpayers of Ten Million Dollars PER JOB maintained! Quite a bargain if you are part of the 1%.
Think how many jobs would be created if we spent that Ten Trillion dollars at home building bridges and schools rather than using it to build bombs...
Bingo!
Bingo indeed!
"In short, for those who do not believe in the military spending fairy, military spending will cost jobs in either the short-term of long-term. If the spending doesn't make sense in terms of advancing national security, then it doesn't make sense period: end of story."
We really need to wind down the wars of choice that are bankrupting the country and drop this role as military hyper-power that is counterproductive. Rather than expanding or maintaining military spending we need to develop a vision for scaling back and transitioning jobs from the military to the civilian sector.
I agree totally with Dean Baker's research and policy advocacy regarding the real world impact of military spending upon job creation in the national domestic economy. However, at a local or regional level, this is a tougher sell.
Commissioning the construction of new aircraft carriers or nuclear submarines is, in fact, a civilian sector job creator/sustainer in Congressional districts where ship building takes place. New orders for military jet aircraft construction does mean a steady flow of jobs for assembly line workers at Boeing plants in the Seattle area. The civilian commercial districts and real estate developers adjacent to huge military installations like Fort Knox in Kentucky, or Fort Bragg in North Carolina, or the naval air station in Pensacola, Florida do expand or contract in response to appropriation changes, or changes in the number of troops stationed there.
What Baker argues is absolutely correct in terms of the national economy. Military spending is a drag on economic expansion in good times, and gives far less bang for the buck in bad times, when a similar size investment in public works infrastructure projects would stimulate far more civilian job creation.
The Pentagon and corporate military contractors have become very skilled at targeting economic benefit arguments at specific communities (and the elected representatives of those communities) where armament manufacturing is already a major local industry, or lots of active duty military personnel are stationed. Rumor has it that for really big future weapons projects, conscious efforts are made to try to assure some component part of the new system will be subcontracted out to each of the fifty states, if at all possible. That way all 100 of the incumbent Senators can be directly lobbied.
Bill from Saginaw
Bill: With all due respect, no one takes into account the large geographic segments of Earth left broken, poisoned, or in abject ruin by the MIC's "products." Where does that factor into the GDP?
Here's the thing: the MIC's tentacles exist as part of each state's infrastructure and yes, jobs are important to increasingly job-insecure Amerikans. The answer is not rocket science: it would involve using these facilities to produce GREEN technology, and using all the readi-manpower to rebuild Amerika from the ground up.
The resources exist, the intelligence exists... what is lacking is the MOTIVE to do the right thing. Real defense is not about exploiting the nation's citizenry to the point of bankrupting its "body" and "soul," but rather, by strengthening all elements of the nation from within. If wars questing after oil cost an enormous amount of oil/fuel to be expended, then the transition to OTHER energies is long overdue. Better science & wiser tech = NO net loss of jobs.
Visionaries need to be writing the nation's policies, not those beholden to the old corporations heavily invested in what was viable yesterday, if at all.
Great posts both. Will the visionaries SR mentions continue to be a few engineers working for giant MIC corporations with government subsidies, tax breaks, contracts and political connections, or will they include millions with no money working out of a garage if they are lucky enough to have one, and with no government help at all?
"Real defense is not about exploiting the nation's citizenry to the point of bankrupting its 'body' and 'soul,' but rather, by strengthening all elements of the nation from within." EXACTLY! If I may also add, real defense is not about trying to eliminate every perceived enemy, because you are the "righteous" and they are the "evil-doers." Real defense (although I don't like calling it "defense") is recognizing all the people of the earth as fellow citizens working towards the same goal of freedom, happiness, and equal access to the basic needs of life, while protecting the earth's resources and bio-diversity which provides us all those necessities.
The historical foundation for this viewpoint is cited in a book available at my web page, The Nazi Hydra in America. Here is a relevant passage:
"In January 1944 Charles Wilson proposed the wedding of the military to corporate America. Wilson suggested that every large corporation appoint a liaison man with the armed forces with a commission of a colonel in the reserve. Excerpts from his proposed wedding follow below.
“'First of all such a [preparedness] program must be the responsibility of the federal government. It must be initiated and administrated by the executive branch—by the President as Commander in Chief and by the War and Navy Departments. Of equal importance is the fact that this must be, once and for all, a continuing program and not the creature of an emergency. In fact one of its objects will be to eliminate emergencies so far as possible. The role of Congress is limited to voting the needed funds. …
“'Industry’s role in this program is to respond and cooperate … in the execution of the part allotted to it; industry must not be hampered by political witch‐hunts, or thrown to the fanatical isolationist fringe tagged with a merchants of death label.'”
http://home.roadrunner.com/~markwrede/NonFic/NaziHydra.pdf
OOOH, looks like the mic is starting the process of outsourcing 1 million jobs.
Good comments by all. Dean Baker is NOT the enemy and it was refreshing to read these comments without the usual attacks on the author because of a minor point in which a reader was ticked off.
Defense spending actually costs jobs as valuable resources and investment are shifted towards propping up a very narrow vision of what our country needs. On a recent trip to Europe, I was surprised when I went to some standard bureaucratic agencies (driver's license, death certificates, etc.) and found that not only did I avoid the multiple hours of lining up (typical when I seek the same things in the U.S.), but the employees were happy to help me and appeared stress free. These are part of job creation programs that benefit the bottom 99% but drive the 1% mad who would have simply paid someone to do their errands to avoid the unpleasantness that the rest of us must endure.
As an experiment lately I have been writing down jobs that would benefit society each time I either come across one or think of one out of the blue. The list started off slowly enough, but now it covers hundreds of positions and millions of potential jobs that the government could provide if it were serious about tending to the unemployed. This is only part of the problem though as the jobs must also pay a living wage, have a decent work environment and a level of security to go along with them.
With my experiment, I found that there are a lot of projects, places and people that need assistance, repairs or new approaches that could easily occupy everyone's time if only the political climate were representative of the bottom 99%. The military was not one of these areas, yet it is the only area that gets consistent attention.
Military spending always creates debt, the lifeblood of the international banksters. All wars are for the benefit of, and designed by, the banking cartels that rule the world.
A few years ago the Pentagon did A study on Global Warming/weather change. They came to the conclusion that global warming was the #1 MAJOR threat to our National Security. I have not heard or seen this statement in any of the recent conversations/debates about the looming peril to our planet, but the Pentagon did come to this conclusion...
This begs the question of where are the Green Jobs initiatives in this country???
Also, with A crumbling infrastructure, bridges, sewer mains, water mains, building foundations, highways, etc., what could be more important to us as A Nation, other than A sound manufacturing base, to firm up our our National Security?? The longer we wait the more expensive and mind boggling these problems become...
A true perspective on how war loving this nation has been and continues to be is to look at how much it spends on the military. To rename civilian spending as defense spending really doesn't resolve the evil core of this impulse--it just capitulates to it. at least in the 60's we talked about "guns or butter" Now our national discourse has degenerated into, "let's just call all of it guns." We live in a very dark time.
In Vermont part of Sen Leahy's campaign was based on the fact that he brought a lot of Pentagon Contracts to the state. He won the election. Now there is NO OWS protest against these local war contractors. No one is willing to 'offend' a dem. You can't claim you're for PEACE if you support weapons manufacturers.
No one is stopping you from starting a protest there.
I am reminded of an essay entitled, “The Enemy Maker,” penned by philosopher Sam Keen (in Meeting the Shadow: The hidden power of the dark side of human nature).
Keen writes:
“If we desire peace, each of us must first begin to de-mythologize the enemy; cease politicizing psychological events; re-own our shadows; make an intricate study of the myriad ways in which we disown, deny, and project our own selfishness, cruelty, greed… onto others; be conscious of how we have unconsciously created a warrior psyche and have perpetuated warfare in its many modes.”
When you have a fascist government. You become what your government supports. As Kissinger said... Control the food, Control the people. Control the resources, Control the continent. Control the money, Control the world.
Our government subsidizes the financial system to keep control of the parts of the world we have conquered. Our government subsidizes the military to control the resources of the parts of the world we haven't conquered yet. Our government doesn't woory about us peon citizens because it knows the cops and national guard will take care of us if we get too out of line.
While our leaders and playing empire the asians have quietly become the people who make the stuff the world wants to buy. They are who we were right before the 1st world war and until the end of the British Empire.
We are going broke trying to rule the world. Your government doesn't care about you. It has too many Muslims to kill and conquer to worry about your pathetic lives. Just pay your taxes and shut up... If you can. Lol
"They are telling them that these cuts will lead to the loss of more than 1 million jobs over the next decade."
how many LIVES are lost to this insanity?
oh, guess that question doesn't count, does it?
we're talking about the $economy$ not humanity!
Uncle*Sam
Why is my education on the chopping block, aren't My Dreams real, is what you say about America just spiel,
Don't worry child, everything is decided, your future is being guided, like the missiles your Daddy builds,
But uncle, Mommy says I am special, Coach tells me hard work and sacrifice made the country great, did I just come along to late,
No worries child, you'll learn to work a touch screen, fly drones from a comfy chair, fast food will be everywhere, raise rug rats, each with their very own screen, teaching the ways and means,
Uncle Sam, what about the planet and the poor, is your liberty only for the few, gathering wealth, building walls and security to fend off the masses, as their pain and suffering flows like molasses,
Listen up kid, get yourself straight, human rights ain't the real fight, that's just cover, scabs on the wound, while others bleed for MY fortune and fame,
Uncle that's not what it says in the Constitution , are We The People simply sheeple,
Now, now little one, perhaps you just need a small demonstration, something to help matters sink in that under educated head, let's see how about a fracking war to boost the economy and slam that peace and love crap, back down your whining trap,
There, there it's all good, now touch the screen, see your daddy's missile fixed everything, sweet dreams...
iDC Individual Directed Capitalization a simple inclusive get something started & accomplished N.O.W. concept. Few could argue or deny The*People if they got off their collective divided, conquered, oppressed asses & demanded global, Individual Directed Capitalization as a starting point to create the peaceful world they desire instead of WISHING some politician, party or Wall Street is going to do anything worth while. My*1040+ 65% of YOUR tax contribution spent in funding areas of YOUR CHOICE.
There is an inherent difference in military and civilian spending. In civilian spending, there is usually a continued circulation in the economy. Civilian goods and services may recirculate in a direct way such as a product produced and re-sold. It may be more indirect like education where the service provided enables the student to become more economically productive. This is not true of military goods and services, which are either expended in a destructive way or remain stockpiled without use. They don't have the same recirculation in the economy.
Furthermore, studies of areas which have lost military bases or military production, and have engaged in a systematic effort at conversion of the resources into another productive use, have found that in the majority of cases. within a few years after closing of the military base or plant the area's economy is stronger than it was before.