Prague Twin

Saturday, January 20, 2007

Cost of War

I've just been reading a post titled, "Escalation and Accidental Military Keynesianism." In it, there are some very interesting predictions and burn models for the Iraq war in 2007 under the Bush escalation. The main point is that expeditures in 2007 in Iraq will top $110 billion dollars, which represents nearly 1% of U.S. GDP. This figure is so large it is hard to even comprehend. It is more that the GDP of all but 45 countries. The country I live in has a GDP of $125 billion, for example. 1% of GDP is the same percentage as the farming industry represents, for example. Quite simply, $110 billion is a lot of money.

A great deal of this money will come back to the United States in the form of salaries and expeditures on American made goods. The effect this has on the overall economy cannot be overlooked. In fact, try to imagine how much the economy would suffer if this money suddenly were not being spent. It is a well accepted battle cry of the left that war is good for the economy and that is what these war-mongers are thinking when they call to arms. The former is undeniable, but the latter is a little too cynical for my taste. Having said that, one must always remember that it is money that makes this world go around. Anyone who tries to seperate politics from economics can expect to be half-informed at best, a marionette at worst.

WWII is generally credited for bringing the United States out of the depression and putting America firmly in charge of the world's economy. There has been a surge in economic activity during every major war the the U.S. has been involved in since. During Vietnam, for example, GNP increased by over 75%.

So if the United States continues to outpace the world in economic growth in 2007, you can be sure that one major reason for that is the war in Iraq. Even if it is just "acccidental Keynesian effects."


  • One of the noticeable aspects of neo-liberal economics is it's inconsistency - or perhaps it is consistent with the 'whatever it takes...' approach.
    So it is not unreasonable to see the "acccidental Keynesian effects." Heartening though, if only because Keynesian economics is more rigorous and consistent.

    By Blogger Cartledge, at 11:59 PM  

  • I can think of more than one good way to spend all that money. Instead of blowing it out of gun barrels, the money could be invested in scientific research. In my view, this would also make the economy grow. Not as fast, since anyone with a muscle can be a soldier, but it takes quite some time to become a researcher.

    Just stating the obvious... back to you.

    By Anonymous romunov, at 12:01 AM  

  • C,

    It seems like the effects are the opposite of they should be at times. Vice is so ofter rewarded.


    That is a good point that I hadn't thought of. I usually think that building roads or electric grids would have the same effect, you know, without all the killing.

    By Blogger Praguetwin, at 12:47 AM  

  • USA Today reported on 16 January 2007 in its Washington Section that the CIA plans to utilize more open sources and blogs in its intelligence work and outsource more of its intelligence software development to commercial contractors in an attempt to re-establish itself as the premiere world intelligence agency.

    The "Strategic Intent" is posted on the CIA public web site. Defense Industry Daily further reports that General Electric is gobbling up Smith's Industries for $4.8B.

    I am a 2 tour Vietnam Veteran who recently retired after 36 years of working in the Defense Industrial Complex on many of the weapons systems being used by our forces as we speak. Let's look at this for a moment and do our patriotic duty by reading along with the CIA (after all, they have announced they are reading this blog)

    1. The new CIA approach comes exactly at the formation of the agency’s new "External Advisory Board", which consists of the following:

    * A former Pentagon Chairman of the Joints Chief who is now a Northrop Grumman Corporation Board Member

    * A deposed Chairman of the Board of Hewlett Packard Corporation (HP)

    * A Former Deputy Secretary of Defense who now heads up a Washington think tank with Henry Kissinger

    2. Northrop Grumman Corporation and Hewlett Packard are two huge government contractors in the Pentagon and CIA custom software development arena. Their combined contracts with the government just for IT are in the multiples of millions. I wonder what the advisory board is filling the CIA's ear with?

    3. Washington "Think Tanks" are fronts for big time lobbies, sophisticated in their operations, claiming non-partisanship, but tremendously influential on K Street. If a lobby cannot buy its way in, why not sit on the advisory board?

    4. GE already has the military aircraft jet engine market. In buying Smith's, it takes one more major defense corporation out of the opposition and further reduces the government's leverage through competition. GE now joins the other monoliths such as Lockheed Martin, Boeing, General Dynamics, Northrop Grumman and Raytheon with tremendous leverage in the $500B +++ per year defense market.

    5. Note the synergy that now exists between the Pentagon and the CIA. Note the influence by the major corporations.

    6. Also note the balance in your bank account and your aspirations for the generations of the future. Both are going down.

    7. The huge Military Industrial Complex (MIC) continues to march. Taxes and national debt will be forced to march straight up the wall to support it. Do you have any "Intelligence” to offer the Pentagon, the CIA and the MIC? For further inspiration please see:

    By Blogger RoseCovered Glasses, at 2:21 AM  

  • woody guthrie said once "if you make it so you can't make no money off war, we'd all forget what we've been killin' folks for."

    easier said than done I guess.

    By Blogger GraemeAnfinson, at 3:36 AM  

  • "Come on Wall Street, don't be slow;
    Why man this is war au-go-go;
    There's plenty good money to be made,
    By supplying the army with the tools of the trade;
    Just hope and pray the war lasts so long;
    Longer then the Viet Cong.

    And it's one, two, three,
    What are we fighting for?
    Don't ask me, I don't know Jack.
    Next stop is Baghdad, Iraq.
    And it's five, six, seven,
    MIC declares dividend.
    Well there aint no use to wonder why,
    We're all marching toward civilization's end.

    By Anonymous Country Joe McDonald and Papa Lebas, at 3:56 AM  

  • I agree with Romunov, that this money could be spent in much better ways.

    By Anonymous Tom Harper, at 4:26 AM  

  • Graeme,


    Papa Lebas... once again your are more than equal to the task.


    That is what I say. Why can't we build an electric grid or more highways?

    By Blogger Praguetwin, at 11:49 AM  

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