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The war was good for the US economy.
Former Member
Posts: 1,876,323 The Mix Honorary Guru
I read a confusing, for me, and upsetting article, for me, that the US economy grew at 2.5% and unemployment is down because of defense spending.
Bombs are good biz?
Bombs are good biz?
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Yep, in short. That's how Hitler got Germany out of the Depression by spending more public money on rearming as well as on public works like the Autobahns. It's basic Keynesian economics - government spends more money -> more money for firms -> firms hire more people -> more people have an income or higher wage -> more spending by consumers -> more money for firms....
Take all this defence spending in America at the moment, the army hires more soldiers, orders more equipment from defence firms so they hire more employees, both soldiers and defence workers have higher wages which they spend locally in shops, restaurants, cinemas, these businesses then hire more staff who then have wages of their own to spend and everyone gets richer.
Of course, there's only so many bombs and bullets you can store away before you don't need anymore, so you have to go to war to use them up so you can order more and continue economic growth - hence you go to war on somewhere like Iraq, you use up your bullets and bombs so you have to order more, plus you have to pay for the reconstruction of the country meaning more work in the construction and planning industry, and looking after the oil wells and controlling supplies means more work for the American oil industry thus increasing economic growth. Meanwhile more oil on the global market reduces its price so materials are cheaper thus reducing the risk of inflation.
The war on Iraq made very good economic sense from America's point of view.