Military keynesianism

ilsm said...

Military Industrial Complex is the Dole.

From Angry Bear debate July 13th 2010:

“Military Keyensian spending does concentrate money in the elite hands, but not only their hands. Many jobs created and saved, and many new business' created and saved, the most important factor is that the money stays in the country.”

Military and war industry jobs and dividends from the “for profit arsenals” are welfare, entitlements for a few paid by the many. If it is social security against the war profits machine; it is 2 or 3 million against 80 million. How can they get the 80 million to pay for the 3 million? Concentration of money in the elites………………… Undue influence!

“Many jobs are created and saved”: The number of military jobs is less important than their impact on the output of the labor in the economy. Military industrial complex the jobs compete for workers should do work that could benefit the broad economy. The military industrial complex creates and saves two kind of jobs, the one is the direct military services or production job making, sustaining and operating unneeded (well aircraft carriers against whose navy) military stuff consuming labor and resources that should be making medical facilities, schools, medical and education supplies and equipment, consumer electronics, healthy food Nikes and blue jeans. The second kind of related jobs is supporting the other military job people doing the war machine jobs in the economy. This second kind of jobs can earn their keep just as well selling to welfare recipients as well as any good they do for the war plant workers. The jobs created and saved are jobs created and saved that make other things in the economy more expensive.

“Many new buisness' [sic] created and saved”: Similarly, the number of businesses is less important than their impact on the output of the economy. How many real manufacturing businesses went under because they had to compete for labor and materials against connected war machine companies which could pay great socialized wages because there is no competition, the congress people keep the contracts coming and they do not have to invest as the DoD RDT&E budget is their development capital? The businesses saved to keep the war machine plundering were saved at the expense of businesses making things for people.

“The money stays in the country.”: Well yes, and especially in places where the military industrial complex is a big part of the state and local economy. This creates political power to keep the military industrial dole working in the locality. Not very Keynesian, actually very high paid welfare state dynamic. It is wrong to equate Keynesian stimulus to welfare, John Maynard had no intent.

How many manufactured things are imported because the US government supports the huge war machine?

beezer said...

TBTF, Military Industrial Complex, Industrial Ag., Health Insurance Megaliths, Big Fossil: They're all Oligopolies doing what Oligopolies do -- limiting competition for the taxpayer dollar to themselves, and using government power to inhibit competition everywhere else.

So far Obama's made serious runs, with limited success it appears, at TBTF and Health Insurance. He's got an energy bill in the works. Now if we can get Michelle really fired up about healthy food and push back against Industrial Ags production of 'shadow' food, we'll be taking on another 'capitalism gone wild' industry.

ilsm said in reply to beezer...

Actually, they are socialized oligarchies or monopsonies, with "undue influence" over their customers.

Check out President Eisenhower's speech of Jan 1961.

Great tales in the government side of the industry how anyone gets to say their "performance" is not good.

Works outside the war machine as well, war machine spending, about equal to SS, is 21% of total US G outlays (including entitlements).

yuan said in reply to beezer...

"serious runs, with limited success it appears, at TBTF and Health Insurance"

1. The Obama-Geithner-Summers administration fought tooth and nail against the Brown-Kaufman amendment. Moreover, the Obama administration has funneled hundreds of billions to TBTF institutions (at the expense of community banks and credit unions). TBTF institutions are larger and more politically influential than ever.

2. Health care reform is a massive wealth grab by insurers. There is little attempt to mitigate costs -- instead we pay insurers "market" rates dictated by anticompetitive monopolies.

sglover said in reply to beezer...

"So far Obama's made serious runs, with limited success it appears, at TBTF and Health Insurance."

That's a joke, right?

Fred C. Dobbs said...

Over time, the various states comprising the USA ceded responsibility for 'National Defense' to the federal government. (And, of course, it's written into the Constitution.) For at least the past 150 years, it's what the Congress (& the people, arguably) believe is the federal government's primary responsibility.

So, a huge establishment was created to fulfill this notion, as Dwight Eisenhower famously noted.

Past time to re-visit our priorities? It'd seem so.

In the mean time, we get to live with the efficiency of a centralized national security operation, which
is clearly interested in its own security at least as much as it is ours.

beezer said in reply to Fred C. Dobbs...

We do have enemies, of course. But our tactics must be designed to the threat.

A clandestine, non uniformed enemy blended into the civilian population, does not call for a huge traditional military response. Unless one is committed to annihilation.

It calls for discrete efforts aimed at favoring a majority of the civilian population, and the further enabling of that majority's ability to combat their very local oppressors.

If those efforts fail, get the hell out of town.

Fred C. Dobbs said in reply to beezer...

It is likely that the Pentagon would be willing to further develop certain special forces to handle Al Qaeda type threats. SEALs, Delta Force, etc. And convert more submarines, build more black helicopters to clandestinely insert them.

And put up more sky-spies to prowl on them. All the while maintaining their various divisions, battle groups, squadrons, fleets & corps, just in case.

fd

150 years ???
since around 1860 ??

since seccession interupted that mandate ??

what about 1790 top 1860 ??

never mind...
"a huge establishment was created to fulfill this notion"
nonsense. look in peace time until 1950. uncle massively reduced our military budget

the present peace time national security state is 60 years old, no older

we had an empire for 50 years before we made the security system a perminent fixture of the federal gub mission

the mission of our earth covering armadas is global hegemony not national security

i doubt anyone seriously doubts that  the GWOT is much more then a pretext police actions would suffice to deal with terror  of course beyond that  its silly to refute a fiction believed in only by wanna believe dupes

Fred C. Dobbs said in reply to paine...

In my view, the US Civil War (aka The War Between the States, The War of Northern Aggression, etc.) was what formed the current conventional wisdom that the primary purpose of the federal government
is to 'secure the Nation', which was what the Civil War was ostensibly about. The GOP, which fomented that war, later became Southern-dominated (where most military bases are), would heartily agree, presumably.

ilsm said in reply to paine...

War profiteers may have enjoyed continuous plunder for the past 60 years Task Force Smith was US/UN force pushed back to Pusan in summer 1950), but the infant was born in 1864 and the toddler in 1914.

it started in 1914 the great war
was good for the US business of war
US arms dealers made up for allied
war making capacity which was hard tried
the advantage the Huns owned Lorraine for war

in 1917 the war profits became a bit lower
the Huns torpedoed the profiteers' shipper
no American boys for the Europe mess
became how could the Hun with profits mess
so Wilson's war was less for ending than for power

US war profiteers did well
then the peace not to tell
when Hitler built his arm
the US had a bent to rearm
lend-lease became the new profit well

task force smith made the news
how could the US so fast lose
the little country on the move
slipt the US from the peace dividend grove
for the next 60 years the US to confuse

War profiteers have enjoyed continuous plunder for the past 60 years, Task Force Smith was US/UN force pushed back to Pusan in summer 1950), but the infant was born in 1864 and the toddler in 1914.

Expensive war profits for stuff so that another Task Force Smith will not be falsely blamed on materiel.

"In war the moral is to the material as 3 is to 1" Bonaparte

ilsm said in reply to paine...

piane,

Why the war machine is never cut.

Of course, there is no need for all that fancy war machine stuff that robs a trillion dollars a year from the US economy.

I was a cold warrior, a bit or two in the nuclear side and mostly in the NATO in Europe side stop the Red army from overrunning Germany planning.

Up to (from about 1950) 1991 the US looked at the Warsaw Pact as a rival in a race to bankrupt each other betting on the huge land, sea (mostly US vestige of great white fleet, not so much USSR) and air forces.

The Soviets went under first, the US is allowing the militarists to continue the plunder, slowly bleeding the US to third world status in non military, health, and consumer production.

But, all that fancy stuff is a hammer that can be wasted and expensively applied to defeating terrorists or radical Islam or whatever the fear mongers want to use to con the bought and paid for congress into making the militarists rich.

When you have bought into bankrupting yourself with shiny expensive hammer, every problem is a nail.

When people question using the hammer to hoe a garden the PAC's and talking heads inform them that they are unpatriotic because militarism is wrapped in the flag.

The great con.

Orwellian!

ilsm said...

beezer has reached the basic flaw of the US war machine. Tactics are for profit, and not associated with operations and strategies to reach ill defined goals.

Fund the most expensive, profitable WW II (industrial age warfare model) equipment for a fictitious set of tactics. The action word is profits.

What is uninformed is: if the enemy can swim in the sea of the population (Chou En-lai) then you are on the wrong side.

Counter insurgency theory is pentagon scam to keep the old WW II formations and use that hammer to till a garden.

Besides profits what is to come from whatever winning is in Afghanistan after the US is bankrupted by its war machine?

Winning is achieving next years profit target.

Perpetual war!

paine said in reply to ilsm...

"the US is bankrupted by its war machine"

our MNCs are on occasion major beneficiary parties here of this "war machine

the pentagon operates largely as an agency of their private off shore purposes

if they need free armed services uncle's armada is global in its reach and if not on call only an incident or two away

NKlein1553 said in reply to paine...

"our MNCs are on occasion major beneficiary parties here"

Is this true for our current wars though? How many U.S. based multi-national corporations operate in Afghanistan? In Iraq haven't many U.S. oil companies been shut out of the bidding process for the development of new and existing wells? I just don't see how the MNC crowd, or anyone else for that matter, benefits from Iraq and Afghanistan. I don't see how anyone could have even thought that land wars in Iraq and Afghanistan were ever going to benefit anyone. It's just one big ongoing mess that only neo-conservative types can find justifications for. And unlike the MNCs, I don't think these neo-conservative types are much driven by the profit motive.

paine said in reply to NKlein1553...

one has to look at this geo politically
access to resources and markets eh ???

afpak is both a beach head and a bridge to central asia
the foft under belly of russia's zone of hegemony
now contested on one flank by china
and two flanks
iraq and afpak
by uncle Sidewinder

MNCs have lots of
time staff and "other folks "
money and credit lines
to think long view
strateegery wise on this stuff

recall
uncle's armada is largely
on little folks' tax based
credit account to begin with
nice set up if you can pull it off
 

Min said in reply to NKlein1553...

"I just don't see how the MNC crowd, or anyone else for that matter, benefits from Iraq and Afghanistan. "

Wasn't there a guy who posted some time back about working for a company in Afghanistan involved in plans to build a "bridge to nowhere" there? (My characterization.) And haven't Halliburton and the company formerly known as Blackwater profited from the war in Iraq?

NKlein1553 said in reply to Min...

The arms producers and mercenary outfits obviously profit, but that is only one subsection of corporate America, and, as Fred points out, these companies are not necessarily multi-national. Besides the aforementioned companies I'm not sure who else benefits and I don't see why the wider population of corporate interests hasn't objected to land wars that seem to have no end. I just don't see the MNCs benefiting from current policy. Paine says the wars in Iraq and Afghanistan give the MNCs a "beachhead," upon which they can expand their access to markets and resources, but has that really occurred? Are there more investment opportunities in the Middle East and Central Asia now that these wars have been prosecuted? Certainly in Iraq I'd say there are fewer investment opportunities. Much fewer. Especially since many U.S. based firms have been shut out of re-development contracts. In Afghanistan I don't think there were very many investment opportunities to begin with. Probably even fewer now. Also, even if the MNCs' target wasn't these two particular countries, you'd think there would be more cost effective ways for MNCs to expand their access to resources and markets in the greater Middle East region than land wars in two such inhospitable nations. Then again, as Paine points out, it's the tax payers, not the MNCs, footing the bill. Maybe it just comes down to politics. Haliburton and other defense firms are simply better connected and therefore able to push policy detrimental to overall corporate interests. I just don't know. But it seems strange that multi-national corporations, whose main goal is to seek profit, should push policies that have so dramatically failed to produce a decent return.

Fred C. Dobbs said in reply to paine...

Large defense contractors are not necessarily multi-national. Lockheed, Raytheon, Northrop, United Technologies, to name a few.

fred
these arms makers and merchants
are special interest outfits
much like health insurers
and private universities
regardless of their site locations
they would be over ruled
by the general corporate community
if there
wasn't plenty in this aramada racket
for real MNCs
err once most of the carrying costs has been off loaded on the ass hole innocent tax payers
credit card

the share of general taxes paid by
multi national corporations
after merlin like
adjustments
for burden shifting and dead weight loss
easily falls below the benefit to them of uncle hegemonic's forced entry
border crossing door blowing operation

2008 rank (Wiki)
(US except as noted.)
1 BAE Systems (UK)
2 Lockheed Martin
3 Boeing
4 Northrop Grumman
5 General Dynamics
6 Raytheon
7 EADS ('European')
8 Finmeccanica (Italian)
9 L-3 Communications
10 Thales Group (French)
11 United Technologies
 

a list of pikers

At one point, we were outspending the insurgents in Anbar by 1,000,000:1 and basically being fought to a standstill.

Electric garage door openers and antique artillery shells were cheap in Iraq.

In Baghdad, they had those nasty cruise missiles that walked on two legs going about 4 MPH. Our technology couldn't touch them.

A.K.A. 'Asymmetric Warfare'.

It's not that they don't know about it,
but it does complicate the business model.

Calling it 'Asymmetric Warfare' and spending a 1,000,000:1 *is* the business model.

Unfortunately, the business model excludes the possibility of an actual military strategy.

bw
you give these guys too little credit
this gig is now 60 years old

look to both the stragey of the hegemon and the long range performance

our MNCs can go more plzaces now then in 50

even former enemies are now markets and points of arbtrage production

we needn't win
we only have to make resisstence so costly most nation states won't pay the price

you can count our small nation opponents on two hands today
and we have only big nation rivals
no longer any out right big nation opponents
since the kold war ended

i'd call that success
not for the americam middle class perhaps
but f them
yankee land partiotism
is for suckers
stuck here fools
and their very own
corporate smoke bombers
and mirror flashers
 

The strategy is perpetual war.

And every terrorist needs serviced at a billion bucks a body count.

The words "national security" are minitruth speak to con the US into giving up a decent life style foe the war machine and the beneficiaries.

Paine is correct the big corporations make huge profit on the war machine and it is intended to keep the Persian Gulf open, among other resource centers to be controlled by the MNC's.

Why doesn't the defense budget get cut?

Pork. Big, fat-laden, juicy pork!

Nuff said.

small cuts are about pork

but really big cuts are about empire
we might ...might get some more higher ed pork and less brass hat pork
maybe
but we'll never get
"come home america" type cuts
that would be a symptom
of
the decline and fall of the yankee MNC system
as we know it

may happen don't count on living to see uit

even then
i note the brits once nearly oppositionless
rulers of most semi or un civilized
regions of our good earth
played taps on empire between
what ?...1946 and maybe 1964 or so

alas
only to become uncle's eager junior partner

robin to bat man

Afghanistan and Iraq were updates of Hitler's Spain and Poland. If Bush (US forces) could have blown through Iraq in a few weeks, there would have been no stopping them from going on into Iran, and, like good Germans, Americans would have applauded wildly.

Woody Allen said: "I can't listen to too much Wagner, it makes me want to invade Poland".

I love that quote!

km

you make a bad analogy

uncle could have blitzed the entire middle east
toppling every regime in the area
but why bother ??

the intransigent enemies of empire would simple do as they have done

i see hezbollah as the paradigm opponent
uncle can't lick
even with total tactical superiority
and a friendly puppet gubmint in place

Precisely.
When "the enemy" was the government (Saddam Hussein, the Taliban), they fell instantly.

The best Bill Clinton was able to do was to flatline defense spending and let it decline as a percent of GDP. Part of the problem is benefits owed to military personnel will not decrease over time.

As for the uber-expensive DOD contracts, we are talking about the sacred cash cows of KStreet.

"Part of the problem is benefits owed to military personnel will not decrease over time"
nonsense that is a self liquidating problem
if you
"euro size " our armed forces

"the $692 billion elephant in the room -- America's defense budget"

If one includes military spending by the state department, department of veterans affairs, department of energy, and treasury department (Military Retirement Fund) the total exceeds 900 billion. And then there is the portion of the national debt that is due to deficit spending on this military...

Base on Robert Higgs' analyses: http://www.independent.org/blog/?p=5827

http://www.bea.gov/national/nipaweb/TableView.asp?SelectedTable=108&ViewSeries=NO&Java=no&Request3Place=N&3Place=N&FromView=YES&Freq=Qtr&FirstYear=2005&LastYear=2009&3Place=N&AllYearsChk=YES&Update=Update&JavaBox=no#Mid

January 30, 2010

National Defense Consumption Expenditures and Gross Investment, 2000-2010

(Quarterly at annual rates, Billions of dollars) *

Qtr1 Qtr2 Qtr3 Qtr4

2000 ( 360.6) ( 376.9) ( 372.7) ( 374.0)
2001 ( 383.7) ( 389.7) ( 395.6) ( 402.8) Bush
2002 ( 420.3) ( 431.9) ( 440.4) ( 458.2)
2003 ( 466.4) ( 507.2) ( 503.1) ( 515.1)
2004 ( 535.9) ( 545.6) ( 565.4) ( 556.2)

2005 ( 578.5) ( 586.1) ( 606.1) ( 585.5)
2006 ( 615.5) ( 624.1) ( 623.3) ( 636.6)
2007 ( 636.7) ( 656.6) ( 674.4) ( 680.8)
2008 ( 703.6) ( 725.6) ( 763.6) ( 758.9)
2009 ( 750.7) ( 776.2) ( 795.8) ( 793.5) Obama
2010 ( 805.6)

* Seasonally adjusted

http://www.bea.gov/national/nipaweb/TableView.asp?SelectedTable=108&ViewSeries=NO&Java=no&Request3Place=N&3Place=N&FromView=YES&Freq=Year&FirstYear=2007&LastYear=2009&3Place=N&AllYearsChk=YES&Update=Update&JavaBox=no#Mid

January 30, 2010

National Defense Consumption Expenditures and Gross Investment, 2000-2009

(Billions of dollars)

2000 ( 371.0)
2001 ( 393.0) Bush
2002 ( 437.7)
2003 ( 497.9)
2004 ( 550.8)

2005 ( 589.0)
2006 ( 624.9)
2007 ( 662.1)
2008 ( 737.9)
2009 ( 779.0) Obama

"Except one area of the federal budget is seemingly off limits: the $692 billion elephant in the room -- America's defense budget...."

Enough, enough, enough falseness. I am tired of analysts continually failing to bother to read and get the defense budget right and always but always understating the defense budget. Basic military spending in 2009 was $779.0 billion and this does not include spending on the Central Intelligence Agency which was $47.5 billion by 2007 and spending on the nuclear arsenal which President Obama has increased to $22 billion yearly and spending on military activities by the State Department.

anne you are wrong
the defense budget also includes our debt service payements
properly calculated its our military spending
since 1950
beyond national defense needs that properly adjusted for unpaid interest
would account for all but 1.8 trillion
of our entire present day
national debt
so throw in that too
you war monger !!!!!
 

"Except one area of the federal budget is seemingly off limits: the $692 billion elephant in the room -- America's defense budget...."

Enough, enough, enough falseness. President Obama has given us basic military spending of $805.6 billion yearly and rising as of January through March 2010. At least be decent or concerned enough to get the basic spending level right.

Note also that even this higher figure ignores the interest on that portion of the national debt that is due to wars. Bush fought (and Obama fights) the two wars in question with a large amount of borrowed money. Counting this "hidden" cost in with the defense budget will increase it even further.

portion ??

try lion's share

I was trying to be modest, since I don't know the actual number. But I believe you are correct.

The Friends Committee on National Legislation has over the years reported a number that includes the interest; my recollection is that they have gotten numbers in the high 50% range. I haven't seen their calculation in a number of years. It's unlikely to have decreased significantly though, and they have a reputation for careful analysis.

Defense is hard!
Let's go shopping!

Ouranio:

Military war in Afghanistan and Iraq, economic war in Europe, reading the Grand Chessboard I wonder...

Here in Greece we have an enemy, that is supposedly Turkey...we are both in NATO, now why we consider each other enemies is beyond my understanding...maybe because the arms producing countries have a lot to loose if we also cut defense budgets?!?!?!

[Why Greece should spend about the highest portion of national income of any European Union country on the military shows just how irrationally self-defeating military spending can easily be. I know of no serious discussion by Greek political leaders to serious limit military spending.]

why assume its irrational for the decider elites ??

Looks like Greece spends about $10B,
Turkey about $30B. Both are around 4% of
GDP. Obviously, though they're trying, Greece
is not keeping up.

ILSM:

"In war the moral is to the material as 3 is to 1" Bonaparte

I do not understand this seemingly interesting aphorism, do explain further.

Math is hard.
Let's go shopping.

I think it means that the moral of the soldiers fighting in the army is three times more important than whatever equipment or technology those soldiers possess. Or maybe it is the moral of the citizens of the country fighting the war; i.e. if there is no support for the war either at home or among the soldiers themselves, then it doesn't much matter how much money, technology, equipment, etc...the army possesses, the war is going to be a lost cause.

Stupid me is confusing "moral," with morale. My explanation depends on the word being morale.

Spelling in hard!
Let's go shopping!

barbie ...eat shit
or get funny

Don't give'em choices.

One of the reasons I like this blog is that here, when it comes to war, the moral is to the material as 3 is to 1.

I have found a few variations of the quote. This one sounds right to me:

"In war, moral factors acount for three quarters of the whole; relative material strength accounts for only one quarter."

-- Napoleon

Also:

"An army's effectiveness depends on its size, training, experience, and morale, and morale is worth more than any of the other factors combined."

:)

Prior to Napoleon, wars in Europe were fought by small armies mostly composed of mercenaries. These mercenaries accepted limited amounts of injury and death as part of the bargain, but they were unwilling to accept annihilation. By contrast, the citizen armies of the French revolution and later Napoleon, were fighting for ideology, rather than money, and so would accept massive losses. Napoleon exploited the fact that his armies were composed of citizens motivated by ideology whereas his opponents were composed of mercenaries via the simple tactic of bayonet charges. The attackers suffered heavy losses, to be sure, but their refusal to back down in the face of these heavy losses caused the mercenaries to break and run, at which point they could be massacred by cavalry. Very simple. Thus evolved the French military maxim that "morale" or "elan vital" was everything, and that a bayonet charge followed by a cavalry charge to mop up the retreating infantry was the essence of tactics. They and the rest of the European armies continued believing that all the way up to well into WWI, even though technology had already evolved by the American Civil war to the point where a bayonet charge was madness. Charge of the Light Brigade should have shown that cavalry was obsolete, but again that lesson wasn't learned until well into WWI.

Morale is of no importance in modern war. What matters is technology and manufacturing and distribution capabilities (plus raw materials in some cases). We can defeat any minor opponent due to our enormous superiority in all these areas. We can (and probably will) be brought to stalemate and retreat by China due to the Chinese superiority in low-cost manufacturing.

'In war, the morale is to the material
as three is to one.' - Napoleon Bonaparte

More properly it could be translated as:

'morale is to materiel as three is to one,'
because US/UK English borrows the French word 'matériel' meaning 'military gear'.

In any case, it is considered very bad for
morale to be cutting expenditures for materiel
while a war is on, which is pretty much 'always',
these days.

Anne,

Napoleon included the morale of the soldiers, the quality of the leaders and the application of strategy and operational skills using tacics as moral. These are independent of the materials of war.

A force highly endowed morally will defeat a materielly larger force.

In Afghanistan (or Vietnam) the US is short on the moral side. Karzai is the mayor of US controlled Kabul, and in the country the US, NATO and Karzai (a US puppet, like Thieu in '70-75 Vietnam) are the invaders. The US has all the power and won't win because the Afghans have all the morale and the operational skills from kicking invaders out since Alexander.

In the case of the modern guerilla, the moral is more like a billion to one against the perpetual war strategy of the US war machine.

This type of thinking goes back to Sun Tzu in 2550 BCE China.

go read my entry about Napoleon above. Morale is of no importance in modern warfare. Morale ceased to be of importance sometime around the middle of the 19th century (for European wars) and was something of a cruel joke during WWI. "Yes, we will make the machine gun lose courage by rushing it with a bayonet charge and thus showing our superior will to win!" The wars we are fighting now are sideshows, as was Vietnam. In a war against China, morale will be of no importance. It will be a case of technology (where we have superiority) versus manufacturing power (where the Chinese have superiority). The most likely result is initial victories for the US, following by exhaustion during a war of attrition, concluding with a draw.

Bill Jefferys:

Joseph Stiglitz has written that the wars in Afghanistan and Iraq were the only wars we have fought that were accompanied by tax reductions. We have run continual deficits through the extent of the wars so an interest expense will be attributable to the wars, but what this can mean in time may well be too arcane to speculate about.

the great dove fear
is an all volunteer armada
funded out of borrowed money

the notion is
americans must feel the pain personally
to hault these escapades

not so sure its that straight forward

Hi Anne, Thanks for provoking my first comment (on the interest component of the national debt that should be attributed to war). I believe that you refer to Stiglitz and Bilmes' book, which correctly warned that the ultimate cost of the wars in Iraq and Afghanistan would be much greater than the "apparent" cost at the time they published the book. I wonder if they might not want to increase their $3 trillion estimate now, given later developments.

Prof Thoma,
Why do you need to shift funding from one progam (defense) to another (like unemployment). The govt issues its own currency and is NEVER financially constrained. What really matters are the real resources the money can buy. How much real resources are dedicated to defense is a political issue. It only becomes an economic issue if there is no slack in the economy and real resources are being diverted to defense. Since we have lots of slack in the economy, your last statement makes no sense. If you want to cut defense spending for political reasons - fine. But don't do it to "fund" some other program.

markg,

Prior to 1948 the US developed and built military goods in peace-time in arsenals and shipyards run by the US government.

After WW II there was a shift to for profit arsenals because it was theorized, and did not happen, that the profit motive would deliver better, faster and cheaper weapons, than staid old civil servants.

The theory did not account for socialism for the few, and Eisenhower pointed out the failings and the undue influence in Jan 1961.

The modern monetarists theories have been proven wrong.

However, the militarists take things like steel, aluminum and other materials which are finite and deny their applications to better uses. Undue influence of socialized profits to private corporations.

The militarists are also inflating the wages paid to engineers and technical workers whose minds are diverted from better uses.

There are a huge number of things that are crowded out by military spending which is a socialized industry whose profits are guaranteed by their undue influence, at the expense of the civil economy.

Wonder why the Soviet Union folded?

It is happening in the US.

Sorry MT for answering.

Not to dispute the presentation as a whole, but regarding this -

"The militarists are also inflating the wages paid to engineers and technical workers whose minds are diverted from better uses"

That may be the case for those folks, but as far as I can see there are more than enough other engineers out there. Even the MIC generates only so much demand for engineers. Any price distortions (that I'm not so sure really exist) will only "spill over" when demand is not strictly bounded.

It is the same as with finance - sure it attracts the "best and brightest" away from other sectors, but only up to a point, and whoever is left over IMO is best and bright enough overall.

At this point I would definitely not worry about the "brain drain" aspect and sucking dry of the engineering supply by subsidized sectors. That non-MIC tech companies "cannot find" engineers is not because of MIC pay levels.
 

OTOH I talked to an engineer working in aerospace/defense, and these guys still have company pensions, which is generally a non-feature in tech, at least for the rank and file.
 

Republicans won't say anything negative about military spending because of their party's position on the war, an the Democrats won't say anything for fear of being called weak by the Republicans.

"an the Democrats won't say anything for fear of being called weak by the Republicans."

I think you are giving the democratic party far too much credit.

Hard to say. Even if the fear of perceived weakness is not genuine as paine suggests, it's still a passable excuse.

In the opposite (?) direction, "European" officials/governments have regularly taken the high road on militarism in good part to whip up local voter sentiment, knowing in their hearts (and minds) that the US will always step up to the plate "defending" the business interests of Western elites - in fact most European nations are part of the Afghanistan campaign, at the very least in token numbers and then some. And "Europe", not least Germany which until recently has been conveniently hiding behind its WW2 legacy, assists with providing and subsidizing operating bases and logistic infrastructure - Ramstein, Landstuhl, etc.
 

only a fool really buys the weak line as decisive

the post kold war dembos as a party
are hardly a peace party
just the small is beautiful lesser war party

irony

the symbiosis of the two perpetuates the national security state
we need an out right anti war party
and so long as we stay "on top"
we'll never get such a party
beyond the angry fringe following stage

Defense is only as good as a strong economy. In WWII, the Japanese started with superior armies and equipment. By the end, our production from our larger economy made our armies and equipment superior. How much "deterrent" do we need?

if we still had the same time scale, it would work, but we don't.
while some ignore the elephant in the room. China has a really good economy, but only if every one is buying from it. so they can invest a lot into defense spending and do. but they can also not record how much they do spend, one of those options in a dictatorship, you can lie about how much you are really spending. and with todays real world, you can move easily and quickly around. our natural defenses are gone. we just try to hide a lot of what we spend, but a lot of it is public too. and we have lost the ability to produce much too. before ww2, we had lots of industrial capacity, that really wasn't being used much. today, not so much. a lot of it has been exported, to China no less

dw,

The Red Chinese/PRC spend about $44B US a year and have by far the largest army in terms of manpower.

The idea that the Chinese are investing to compete with the US war machine is fearing a few 10's of billions against the trillion a year waste machine.

On second thought the PRC reads and studies Sun Tzu. Be very afraid the trillion dollar machine is economic weakness the PRC is going to exploit.

The turn time of technology is a red herring most everything made in the war fare state is years late and trash when finally delivered. Tactics to fight WW II again. The Chinese will tilt in other arenas.

Ford and GM made most of the airplane in WW II, a big war needs an industry to mobilize, which the US has lost.

See F-22 and F-35 and find a test report that says anything other than the quality is bad, the term in "unsuitable" even against watered down tests.

The PRC is less an excuse than the terorist to plunder the US economy.

"and we have lost the ability to produce much too"

More so the willingness, but the ability will surely follow and probably already is, slowly but surely. Where there is a will there is not always a way, but where there is no will there is surely no way.

We obviously didn't have enough "deterrent" in 1941 to deter either the Japanese or Germans from attacking us. The US had 400,000 dead.

Its estimated that total deaths in WW2 were 50-70 million. China, Poland, Russia, and France didn't have enough "deterrent" either.

Its not 1920 anymore - oceans don't provide much protection. And we may not have 2 years to gear up.

A case could be made - and was in the 1930s - that we shouldn't care about what happens beyond our borders.

So indeed, how much "deterrent" do we need?

"We obviously didn't have enough "deterrent" in 1941 to deter either the Japanese or Germans from attacking us."

The Germans never attacked us. We declared war on them, because they were stupid enough to do the same to us, in support of their Japanese allies.

"Its not 1920 anymore - oceans don't provide much protection. "

Yeah? Please tell me whose armada is going to invade American waters. While you're at it, I'd love to hear where, exactly, the sequel to Operation Overlord is going to be.

Sooner or later Americans are going to figure out just how exceptional the 1935-45 period was. Maybe then they'll realize what a lousy yardstick it is for measuring strategy and foreign policy.

"Germans from attacking us"

???

Maybe you mean attacking the allied forced over there in Europe ...

Michael Cohen: "If there's one issue that seems to unite an increasingly divided and fractured capital, it is the ever-expanding federal budget deficit."

"Seems to"? "Unite"? "Ever-expanding federal budget deficit"?

You have got to be kidding.

Yes, politicians of both major parties decry the debt and deficit. But the Dems are honest about that. They believe in taxation. The Reps are using the deficit as an excuse to attack social programs.

The parties are hardly united about it, as the recent filibuster vote against extending unemployment benefits and aid to the states, and the filibuster override indicate.

And to describe the deficit as "ever-expanding" is patently false.

Mark Thoma: "In the short-run, cuts in defense spending (or more "restraint") could be used to temporarily fund recession fighting and job creating programs."

In the short run, cuts in _domestic_ military spending would be anti-stimulus. By domestic military spending I mean spending on domestic bases, domestically based personnel, procurement and R&D.

Keynesian stimulus should be pumped into the economy quickly. Even if there are better long term uses of the money than domestic military spending, the worst thing you could do economically would be to impose the delays and frictions associated with sector switching as discharged military personnel and laid off defense workers try to find new jobs in an economy that already has close to 10% unemployment.

Sasha,

Exactly. Stimulus spending is stimulus spending. I'll take it in any form we can get it right now. And if the Democratic leadership in Congress were smart (which they aren't), they would off the GOP a deal they couldn't refuse. Democrats should package relief for state and local governments along with a big boost in DoD operations and maintenance dollars, military construction and university research grants. Those are the kinds of programs that the GOP would find hard to turn down. Those programs would also have a fairly short shelf-life, so the Administration could unwind them as the economy recovers. Finally, a sublter benefit of dumping big money into repairing existing end items (tanks, planes, howitzers, ships, etc.) is that it will make it a lot harder for some elements in DoD and defense contractors to argue that we need new systems to replace those that were just overhauled and upgraded.

In the short run, yes. Anything that is established is difficult to replace at scale quickly. But I think the suggestion is that with "other" (infrastructure?) spending you can get more bang for the buck, in terms of employment and lasting value. But probably not in the very short term. OTOH that's what getting suckered into throwing good money after bad is all about.

The miltary budget is Congress's greased pig running willy nilly through the hallowed halls on Capitol Hill that no one can catch

“If there is one principle more deeply rooted in the mind of every American, it is that we should have nothing to do with conquest.” Thomas Jefferson

“If there is one principle more deeply rooted in the mind of every American, it is that we should have nothing to do with conquest.” said the slaveholder, who asserted that all men are created equal, endowed with inalienable rights, just before he set the nation on course to conquer a continent.

'Seize', perhaps, or 'secure', if not 'purchase',
more than 'conquer', if one may take a more generous/hypocritical view. How did these
citizens, recently colonists & subjects,
get to be where they were, anyway?

Not without a touch of irony, though.

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Defense Spending and Deficit Reduction

The defense budget seems to be off the table when it comes to budget discussions, but it shouldn't be:

America's Unquenchable Defense Spending, by Michael Cohen: If there's one issue that seems to unite an increasingly divided and fractured capital, it is the ever-expanding federal budget deficit. ... Except one area of the federal budget is seemingly off limits: the $692 billion elephant in the room -- America's defense budget.

The calls from Republicans and Democrats for belt-tightening rarely, if ever, seem to extend to the military. Deficit hawks in the House have even demanded that an amendment to the $37 billion Afghanistan spending bill that would allocate $10 billion to prevent teacher layoffs ... be paid for with offsetting spending cuts. No such demands have been made about war spending, which since 9/11 tops more than $1 trillion. ...

Yet, outside ... Social Security, Medicare and Medicaid, the defense budget is by far the biggest chunk of the nation's fiscal pie. Aside from money allocated for the Pentagon there is another more than $300 billion in additional outlays for costs like homeland security, military aid, veteran's benefits and military-related interest on the national debt. That's more than $1 trillion in taxpayer money -- or about $3 out of every $10 in tax revenue.

And while the defense budget has been growing for decades, since 9/11 the numbers have jumped significantly. ... [T]he money is not just going to pay for wars in Iraq and Afghanistan. Nonwar defense spending makes up more than a third of the increase.

All of this is happening at a time when the U.S. faces no major foreign rival and al-Qaida, according to the nation's intelligence chiefs, has been reduced to a mere 400 to 500 key operatives in Pakistan and Afghanistan. In Afghanistan alone, the U.S. is spending $100 billion and deploying 100,000 troops to face an enemy that has only about 50 to 100 operatives in the entire country.

Trimming the defense budget will not solve the country's deficit woes, but it would certainly help. Moreover, smart spending cuts would allow lawmakers to divert money toward creating jobs and growing the economy -- steps that would, over time, do far more to reduce the deficit. A recent report by the Sustainable Defense Task Force ... found nearly $1 trillion in possible savings over 10 years. ...

[I]f Congress is willing to consider cuts to Social Security and Medicare, or won't even fund money for teachers and benefits for the unemployed out of deficit fears, why should the defense budget be off the table?

Of course, as the report also suggests, the surest way to truly reduce U.S. military spending would be to adopt a policy of greater "restraint" that makes the deployment of U.S. forces a true last resort, minimizes overseas commitments and stops subsidizing the defense responsibilities of our allies in Europe and Asia. ...

In the short-run, cuts in defense spending (or more "restraint") could be used to temporarily fund recession fighting and job creating programs. In the longer run, as those expenditures expire, the reductions in defense spending would help with the debt problem.

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