Nobel prize winning economist Paul Krugman wrote [30] yesterday:
Military spending does create jobs when the economy is depressed. Indeed, much of the evidence that Keynesian economics works comes from tracking the effects of past military buildups.(Mr. Krugman has said the same thing many times in the past [31]. And many other influential people have said the same thing [32].)
I am not a Nobel prize winning economist … but Joseph Stiglitz is.
Stiglitz wrote [33] in 2003:
War is widely thought to be linked to economic good times. The second world war is often said to have brought the world out of depression, and war has since enhanced its reputation as a spur to economic growth. Some even suggest that capitalism needs wars, that without them, recession would always lurk on the horizon.Stiglitz has also said that this decade’s Iraq war has been very bad for the economy. See this [34], this [35] and this [36].
Today, we know that this is nonsense. The 1990s boom showed that peace is economically far better than war. The Gulf war of 1991 demonstrated that wars can actually be bad for an economy.
A No-Brainer
This is a no-brainer, if you think about it.
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2 comments:
I high casualty war is good for the economy as it reduces the available workforce and burden on the social welfare system.
Wow, economic ignorance is pretty widespread. No, 4:47, a high casualty war isn't good for the economy. Having fewer workers is actually bad for economic growth. If the price of labor goes up, that destroys wealth. If there aren't enough workers to fill certain industries or specialties, that destroys wealth. And, finally, if there are a lot of wounded soldiers who return home, that actually increases the burden on the social welfare system.
War isn't good for the economy in any way.
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