Martin Feldstein: MIC shrill and Keynesian
Posted on December 24th, 2008 by bile Tags: Barack Obama, Department of Defense, Department of Homeland Security, Empire, F-22, FBI, Federal Bureau of Investigation, Keynesianism, Malaysian Indian Congress, Martin Feldstein, Military Industrial Complex, tyranny, White House Office of Management and Budget 1 Comment »AP/USAF We could use some more F-22s
The Department of Defense is preparing budget cuts in response to the decline in national income. The DOD budgeteers and their counterparts in the White House Office of Management and Budget apparently reason that a smaller GDP requires belt-tightening by everyone.
That logic is exactly backwards. As President-elect Barack Obama and his economic advisers recognize, countering a deep economic recession requires an increase in government spending to offset the sharp decline in consumer outlays and business investment that is now under way. Without that rise in government spending, the economic downturn would be deeper and longer. Although tax cuts for individuals and businesses can help, government spending will have to do the heavy lifting. That’s why the Obama team will propose a package of about $300 billion a year in additional federal government outlays and grants to states and local governments.A temporary rise in DOD spending on supplies, equipment and manpower should be a significant part of that increase in overall government outlays. The same applies to the Department of Homeland Security, to the FBI, and to other parts of the national intelligence community.
The increase in government spending needs to be a short-term surge with greater outlays in 2009 and 2010 but then tailing off sharply in 2011 when the economy should be almost back to its prerecession level of activity. Buying military supplies and equipment, including a variety of off-the-shelf dual use items, can easily fit this surge pattern.
For the military, the increased spending will require an expanded supplemental budget for 2009 and an increased budget for 2010. A 10% increase in defense outlays for procurement and for research would contribute about $20 billion a year to the overall stimulus budget. A 5% rise in spending on operations and maintenance would add an additional $10 billion. That spending could create about 300,000 additional jobs. And raising the military’s annual recruitment goal by 15% would provide jobs for an additional 30,000 young men and women in the first year.
So building death machines and expanding the military industry complex will make things better? Ignoring the MIC component completely it’d seem to me that opportunity cost alone would show this to be false. By definition the free market is the most efficient use of resources at any particular time. The further you get away from someone’s top priority the worse you make things. Throwing money at multimillion dollar flying death machines is pretty low on most people’s list. People want defense from possible harm but F-22s and the American MIC don’t provide that. They make us less safe. These Keynesians are destroying us from within and pissing off others without.








