Do wars get us out of recessions? Like for the Great Depression and World War II?

gamecock wrote:

Yes, WWII ended the depression. It was the ultimate "stimulus package," and putting 12 million men in uniform didn't hurt unemployment any.

Where did the funds come from to pay for those 12 million men in uniform? The money fairy? There was a heavy cost associated with it. It may have skewed unemployment numbers, but soldiers are NOT productive citizens in their role as a soldier. They're tax consumers.

If the only measure of the depression was unemployment it certainly ended it, but not legitimately. We could make unemployment 0% today if we just conscripted everyone that was out of work.

Didn't any of you guys learn about all the rationing, victory gardens and other measures the government forced upon the populace? Those things are not the sign of a healthy economy.

Yes, wars get a nation out of a recession, even a depression.

This was the case in 1939, when the US war machine started gearing up in response to WWII. After the war there was an immediate recession, however the wealth and industry created from the war allowed the country to grow for the next several decades, until the end of Bretton Woods and the beginning of true money printing allowed the US to print its way to prosperity.

Again in 2003, with the economy having sunk from the Internet Bubble, the escalation of the war on terror allowed the economy to grow again.

Increased defense spending pumped an additional 200 Billion dollars a year since the start of the war into the US Defense industry, which allowed Defense contractors to funnel money into other US industrial businesses, providing employment for millions of people.

This increase in spending, in addition to lower interest rates fueled the housing boom, and subsequent bubble, which burst in 2007.

With the War on Terror winding down in terms of spending and Obama cutting back on defense spending, at a time when money printing will likely not solve the problem faced currently, the economy will contract again at least in terms of purchasing power parity, likely with the Fed's delayed outlook on inflation, it will never officially be called a 'depression' simply because it is in a inflationary environment.

Understanding global economics/politics in this manner is important in understanding how the world really works. US debt and currency is backed by US military power, and in turn the US economy is backed by US military spending. This allows the US to consume more than it produces, exporting wealth abroad to other nations such as China, Russia, Japan, and the EU zone.

The defense budget, in terms of size represents a 'bailout' every year of roughly 550 Billion (1000-1200 Billion in total including energy/war/research spending). A decrease in this number of a few hundred billion as seen recently will result in a drastic number of job losses as programs are terminated and products go unconsumed by the defense sector and their many and numerous industrial partners, as well as the products consumed by workers employed.

Money removed from defense spending and allocated in other growing industries is less effective in creating jobs as those industries have yet to gear themselves appropriately to demand and growth, although in time (10-20 years) feasibility may be achieved. Additionally, reallocated money used to bailout financial institutions has not stopped job losses, or increased job growth in that industry as the last six months have shown continuing deteriorating economic conditions. The market reversal of the last half of the year is considered by many an effect of money printing/inflationary environment as well as part of a natural Fibonacci trading cycle/euphoria stemming from Christmas spending outlook and further bailouts as well as the hope that the economic decline stops in 2010, as well as automated machine trading/short squeezes used to bolster market conditions.

In summary, War is essential for economic growth at this point for America, either in acquiring Oil assets, backing the US Dollar, and creating jobs.

By sending 30k troops to Afghanistan and not completely slashing war funding, Obama is acknowledging this, although democrats refuse to understand that declining defense expenditures will result in deteriorating economic conditions, at a point in time when deteriorating economic conditions are the norm.

Likely at this point, we are on the verge of a depression (or inflationary depression) in which the only way out within the next 10 years is a large scale war involving millions of Americans, and many trillions in Defense expenditures.

War gets a nation out of a recession, War can keep a nation out of a recession, War grows an economy, War advances scientific knowledge and understanding.

The only thing that has a chance of reducing unemployment significantly in the near future, without simply redistributing tax money(like wars), is a developing renewable energy industry.Everything else is already overproduced or we get it extremely cheap from Asia and Africa.

dfsfd wrote:

The only thing that has a chance of reducing unemployment significantly in the near future, without simply redistributing tax money(like wars), is a developing renewable energy industry.Everything else is already overproduced or we get it extremely cheap from Asia and Africa.

Renewable energy industry employs around 85,000 people in the United States, and is growing at a rate of around 40,000 jobs a year.

By comparison, the US Defense industry employs at one of the smallest estimates 690,000 people. Most other tie in industries employ hundreds of thousands of other associated jobs. At the least this number can be considered around 1 Million in the private sector, with another several hundred thousand employed by government (military/security/civilian) in related fashion.

The renewable energy industry is also more prone to competition from other nations, which the defense industry is fundamentally immune to due to security. This means renewable energy jobs are more likely to be outsourced as the industry grows, in a similar way that E-commerce, and Software have been in the US.

Additionally, renewable energy materials are tied in less to the rest of the US industrial base, as more can come from abroad. While renewable energy does reduce energy demand required from abroad, it will not save as many jobs at this point in time (right now to the next 5 years) as preserving Defense spending will.

Your statement comparing the two is fairly close to liberal hypocrisy and double talk, as well as shows a fundamental misunderstanding of economics, as well as the current financial and economic crisis this country currently faces.

Frankly, your statement is neither insightful or important.

Perhaps in 20 years your statement will have relevance, but until then you should concede to common sense, which is War and War spending allow an economy to grow...

Now if you want to make an argument this increases debt, and fuels a boom-bust cycle in economics, and add in economic understanding of greater macro-cycles in economic events, by all means.

it could if they got rid of the handouts given to the casualties. the va and the $250k death benefit insurance costs the taxpayers billions for as long as the dumbasses stay alive. the va has become the 2nd largest entitlement in the federal budget. we let the shit of america suck taxpayers and the u.s. economy. this has to stop now.

the pentagon needs to dump duplication of jobs. example all the branches have infantry soldiers which is stupid. the air force, navy should get rid of their infantry. the af, nav, and marines have separate jets and helos. they should all buy the same aircraft and stop the boondogggle.

the pentagon should use civilian minimum wage temp workers with no benefits, i.e. not civil servants. the pentagon should use these temps to drive trucks and cook food. why ? the army is only 15% combatants, navy and air force is < 1% combatants, marines 90% combatants, coast gurad almost 0% combatants. why train these do nothings and give them va benes, college benes, and life ins when they don't fight. just hire temps, undocumented wops and wetbacks, ex-cons, homeless, trailer park trash, high school dropouts, punchdrunk football players, and dopers, and pay them minimum wage, no insurance, no va benefits. this would cut the pentagon budget by 80% and save the money for weapons and the war fighters.

Closing the VA Hospitals would save 100B per year. Let the private medical system and county handle the injured. Maintaining huge federal sink holes is not what our founding fathers wanted. It's not the free enterprise system when the government has their own hospitals and doctors.

Shut down VA Hospitals wrote:

Closing the VA Hospitals would save 100B per year. Let the private medical system and county handle the injured. Maintaining huge federal sink holes is not what our founding fathers wanted. It's not the free enterprise system when the government has their own hospitals and doctors.

Its a nation's responsibility to take care of its wounded and fallen.

The founding fathers would argue quite the opposite, being that the majority of them fought themselves. What relevance would a government have if it didn't take care of its own? Who would want to work for it?

Its a nation's responsibility to take care of all it's inhabitants. Private doctors and hospitals, and health care reform will take care of all. Elimination of the current feudal caste system, with separate U.S. government and facilities is an absolute requirement. This is our country.

SCATBURGER wrote:

Its a nation's responsibility to take care of its wounded and fallen.

The founding fathers would argue quite the opposite, being that the majority of them fought themselves. What relevance would a government have if it didn't take care of its own? Who would want to work for it?

While I understand this sentiment as an abstract, in reality I don't agree with the statement.

Where does "the nation" get the money for this care? They get it from taxpayers (like me). No troops in my lifetime have been sent for what I would be considered a worthy cause, so why should I be forced to pay for it? I am being victimized in this situation.

The government doesn't "take care" of anyone or anything, they simply confiscate the money of productive people to pay for their pet projects.

What would be much better is to avoid the need for VA hospitals by eliminating veterans. By this I mean stop having so darn many people in the military.

Mtn Dew wrote:

While I understand this sentiment as an abstract, in reality I don't agree with the statement.

Where does "the nation" get the money for this care? They get it from taxpayers (like me). No troops in my lifetime have been sent for what I would be considered a worthy cause, so why should I be forced to pay for it? I am being victimized in this situation.

The government doesn't "take care" of anyone or anything, they simply confiscate the money of productive people to pay for their pet projects.

What would be much better is to avoid the need for VA hospitals by eliminating veterans. By this I mean stop having so darn many people in the military.

Taxes are a part of life, whether you agree or not Taxes are voted on by the Congress you helped elect, by either voting for a constituent, or not voting. Either way you are hypocritical for saying you don't agree, when in fact you have given your permission already by voting that member in by participating in the voting process.

Even if you did not vote for the current member, or ever have, you support the democratic process by participating in it, or not. Remember, it is the plurality around you that decides.

Also, if the government did not make it abundantly clear that it will take care of its service members, it would be very difficult to justify its existence as over time it would be less capable of defending it.

With a smaller military as well, the nation would be less capable of defending itself and its interests, such as Foreign Oil, Foreign Business interests, the well being of its allies and ideologically similar nations regardless.

Do you use Oil in your car? Do you use roads to drive to work, or school? Does your job not depend on a safe capitalist society in which to work? Do you value the safety of your family?

Without taxes, with a smaller less capable military, with a more ineffectual government that has less legitimacy there would be anarchy.

It seems while you may not agree with my statement you are in fact a hypocrite to think otherwise. At least if you are going to make a point such as you have you can make detailed points about it. Some here are trying to be civil in their discussion and not simply disagreeing to disagree.

You made a great argument for not voting. Simply taking part in the process does not in any way legitimize the outcome. Tell a black man that voted in the South in the 1960s that he's essentially giving his consent to a segregationist because he took part in the process. Of course, this is why I do not vote any longer, that and there are no candidates I can vote for in good conscience on the ballot.

A smaller military would be a great thing. Our military is bloated to absurd levels. The military could be 10% of what it is today and our national security wouldn't suffer at all. We have troops in over 170 countries, there's just no need for that.

It is quite possible to have roads, oil and all the great things in life without the government providing them. It is a straw man argument to say that society needs X and so government (taxes) is the only way to provide it. I simply do not agree with that statement.

perhaps you missed the point.

By not voting, your are deeming the outcome acceptable. The only way you are going to make change as a citizen is by taking action in your community.

Promote your ideals and VOTE. Otherwise shut up about the outcome.

It doesn't matter what the outcome is, legitimate or not. Its the system of voting that is important here-

The seeming majority of the electorate, those around you, elected that individual that makes policy to make it. If you have a problem change the process or individual. If you don't be quiet.

Make sense or is this concept too far over your head?

I love peeps wrote:

Increased defense spending pumped an additional 200 Billion dollars a year since the start of the war into the US Defense industry, which allowed Defense contractors to funnel money into other US industrial businesses, providing employment for millions of people.

In general, defense spending is the worst deal as far as tax spending to create jobs. Defense sector jobs pay well, but for every defense dollar that goes to an employee's pay, many more dollars are spent on the cost of materials and the rest are simply transferred to corporate profits. Also, the current war will prove to be a tremendous economic drain in the future due to the fact that we have done an excellent job with battlefield medicine. Fewer soldiers are dying, but more are coming back with injuries and conditions that will require a lifetime of expensive treatement. Thus, wars are always a net economic loss, unless you are the only guy left standing and can make money rebuilding everyone you bombed. We tried this approach in Iraq, but the locals still are not convinced that we invaded to get the WMDs.

A book badly needs to be written about the idea of whether WW2 got us out of the depression.

The notion that a huge amount of spending on blowing things up in Europe doesn't make any sense.

What mattered a lot was a real highly progressive tax system being put in, rationing, and the War forcing the government to earn the people's trust again.

Mtn Dew wrote:

Where did the funds come from to pay for those 12 million men in uniform? The money fairy?

The money came from the future, and we are that future. I analyzed this once. Going on memory, I think it was something like $1 trillion of the current national debt can be attributed to WW2. 63 years later and we're still paying for it.

We're still paying for the Revolutionary War for that matter.

When we have to borrow money from China to finance a war, and to buy crap that China sells, it does not pull anyone out of a recession.

Yep. But don't forget, this is all Bush's fault.

somedrunk wrote:

it did back then. don't know about now.

WWII got us out of the new deal which had the economy in a stranglehold right into the 1940's. We took on tons of war debt and were only able to repay it in the 1950's because our main trade competitors were literally in ruins.

That is not the case now. Japan, Europe, China and even South America can compete in many areas.

Remember, it took a decade to recover from similar strategies after four years of Jimmy Carter and that was after Reagan had essentially turned the economic ship 180 degrees.

Obama has tripled the mistakes of the Bush administration(debt, takeovers and taxes) rather than reversing course.

This debacle may be only just beginning.