A Military Bubble Economy?

The US has seen some impressive economic growth over the last few months. Employment is up and the economy is humming. Bush and Co. would like to attribute this economic recovery to the tax cuts implemented in last year's budget. However, it would appear that the bulk of the stimulus has come from the rather hefty increase in American military spending. An important question for Americans to ask is, just how much of the current rosy economic picture is due to pouring hundreds of billions of dollars into supporting a war effort?

"In the first three months of this year, defense work accounted for nearly 16 percent of the nation's economic growth, according to the Commerce Department. Military spending leaped 15.1 percent to an annualized rate of $537.4 billion, up from $463.3 billion in the comparable period of 2003, when Bush declared major combat operations in Iraq over." (for the full article click here)

The problem with war spending is that while it gets people working, the jobs are dependent upon continued conflict. Should major conflict end, those jobs will disappear as companies cut production to peacetime levels.

Another problem with a wartime economy is that the bulk of production is dedicated to expendable goods that provide no lasting investment. Bombs and bullets can only be used once. Investments in infrastructure like roads, sewers and public transit provide a lasting contribution to the economy as the benefits they provide can be used repeatedly by the population.

I find it interesting to note that a pro-business anti-government administration like Bush and Co. is willing to spend billions to impose their will on a foreign nation, but spending that money to directly benefit the American population is some how dangerous socialist coddling. From the Bush Administration's point of view it would appear the military and the giant American corporations that support it are the only institutions in the US deserving of socialist coddling.