WAR: The Fiscal Stimulus of Last Resort

CommUnity of Minds — Ellen Brown writes:

“War!  Good God, ya’ll.  What is it good for?  Absolutely nothin’!”

So went the anti-Vietnam War protest song popularized by Edwin Starr in 1970 and revived by Bruce Springsteen in the 1980s.

The song echoed popular sentiment.  The Vietnam War ended.  Then the Cold War ended.  Yet military spending remains the government’s number one expenditure.  When veterans’ benefits and other past military costs are factored in, half the government’s budget now goes to the military/industrial complex.

After 9/11, the pop hit “War” was placed on the list of post-9/11 inappropriate titles distributed by Clear Channel. Protesters have been trying to stop the military juggernaut ever since the end of World War II, yet the war machine is more powerful and influential than ever.  Why?  The veiled powers pulling the strings no doubt have their own dark agenda, but why has our much-trumpeted system of political democracy not been able to stop them?

The answer may involve our individualistic, laissez-faire brand of capitalism, which forbids the government to compete with private business except in cases of “national emergency.” The problem is that private business needs the government to get money into people’s pockets and stimulate demand. The process has to start somewhere, and government has the tools to do it. But in our culture, any hint of “socialism” is anathema. The result has been a state of “national emergency” has had to be declared virtually all of the time, just to get the government’s money into the economy.

Other avenues being blocked, the productive civilian economy has been systematically sucked into the non-productive military sector, until war is now our number one export. War is where the money is and where the jobs are. The United States has been turned into a permanent war economy and military state.

The notion that war is good for the economy goes back at least to World War II. Critics of Keynesian-style deficit spending insisted that it was war, not deficit spending, that got the U.S. out of the Great Depression.

But while war may have triggered the surge in productivity that followed, the reason war worked was that it opened the deficit floodgates.  The war was a huge stimulus to economic growth, not because it was a cost-effective use of resources, but because nobody worries about deficits in wartime. (09/13/11)

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