War and Inflation

[Peter1469]

Indeed and people should be very cognizant of the high opportunity cost the MIC has had on the US economy. Its essentially a trillion dollars per year, every single year. Defense + VA.

What about technological advancements coming from war that end up with civilian applications?

[Newpublius]

What about technological advancements coming from war that end up with civilian applications?

How many scientists got their guts ripped out by an MG42 on Omaha Beach? We'll never know.

Prior to 1940 think about all of the innovation that happened in the US with a much, much smaller military footprint.

The fallacy of government agency is that people begin to think that but for the government spending the thing the government is spending money on wouldn't be done.

Whether its a school or research or whatever, government spending on the military is not the sine non qua of innovation.

[An army of] a hundred thousand men, costing the taxpayers a hundred million of money, live and bring to the purveyors as much as a hundred million can supply. That is which is seen.
But, a hundred million taken from the pockets of the taxpayers, ceases to maintain these taxpayers and their purveyors as far as a hundred million reaches. This is that which is not seen. Now make your calculations. Add it all up, and tell me what profit there is for the masses?
-Frédéric Bastiat

[carolina73]

All great theoretical talk but the truth is that their will be wars.

The best way to avoid them is to project strength and present a threat.
Being naive and wishful does not keep the wolves away.
Mutual defense is the reason that tribes/governments were formed. So if you are going to cancel any program than the military would be absolutely the last in line.

[Chris]

Indeed and people should be very cognizant of the high opportunity cost the MIC has had on the US economy. Its essentially a trillion dollars per year, every single year. Defense + VA.

When we went into war the economy was tanking and the New Deal, as @carolina73 prolonged if not made worse the Great Depression. Much as war is a waste, it put nearly everyone to work producing and the economy churning such that when Congress after the war ended New Deal and war footing programs America prospered like never before.

[Chris]

Let me be clear here, I'm not advocating war as a means to prosperity but arguing that where FDR's New Deal policies failed war did succeed in getting us out of the Great Depression.

As Smedley Butler put it, “War is a racket. It always has been. It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.”

[Newpublius]

Yet prosperity returned not after the New Deal but after the war was won.

But why? It was because the government slashed spending by something on the order of 50%. What happened was that as the US demobilized, everybody came home, the government slashed spending, all the taxes that were funding the war effort were now being spent on things that people actually wanted. Indeed there was transitory inflation because that spending was being spent, initially, into the war economy and it had to shift from guns back to butter. The economy boomed because the war ENDED not because of the war spending.

War might be justified by genuine necessity, but that doesn't mean it doesn't represent a colossal waste of resources. Again completely ignoring the obviously gut wrenching and very real human suffering that is occuring.

[Chris]

But why? It was because the government slashed spending by something on the order of 50%. What happened was that as the US demobilized, everybody came home, the government slashed spending, all the taxes that were funding the war effort were now being spent on things that people actually wanted. Indeed there was transitory inflation because that spending was being spent, initially, into the war economy and it had to shift from guns back to butter. The economy boomed because the war ENDED not because of the war spending.

War might be justified by genuine necessity, but that doesn't mean it doesn't represent a colossal waste of resources. Again completely ignoring the obviously gut wrenching and very real human suffering that is occuring.

Yes, that's just what I argued. The end of the war allowed Congress to cut New Deal and war spending. The old New dealers wanted to return to the alphabet soup of centralized government control that only prolonged the Great Depression.

But we had to fight that war to reach that point. Without the war nothing would have ended the centralization of the New Deal. We could well have ended up like the Soviet Union with its central planning.

Again, I'm not defending war, I'm arguing it was more contributive to prosperity than the New Deal ever was.

[carolina73]

But why? It was because the government slashed spending by something on the order of 50%. What happened was that as the US demobilized, everybody came home, the government slashed spending, all the taxes that were funding the war effort were now being spent on things that people actually wanted. Indeed there was transitory inflation because that spending was being spent, initially, into the war economy and it had to shift from guns back to butter. The economy boomed because the war ENDED not because of the war spending.

War might be justified by genuine necessity, but that doesn't mean it doesn't represent a colossal waste of resources. Again completely ignoring the obviously gut wrenching and very real human suffering that is occuring.

The problem with government is that it's spending usually has little need. The bridge to Nowhere may being the supreme example but there are all degrees of waste.

Investment requires a need. War does not create need. Rebuilding creates need.
It was the rebuilding after WWII that created a post war economy.

So the 5G waste will create little return. That's why the private companies wanted the government infrastructure project to pay for it. The Infrastructure Bill was filled with waste because there was not justifiable need.