The Case That Wars Fuel U.S. Economic Booms
By Mark Ames, AlterNet. Posted February 24, 2009.

http://www.alternet.org/audits/128720/?page=1

In the great debate about the stimulus package -- which, underneath all the cant is really nothing more than a debate about how America's scarce wealth should be divided --  one of the right wing's favorite mantras was their claim that the New Deal did nothing to end the Depression. Instead, they argue, it was World War Two that ended the Depression.

...

If war is what fuels American prosperity, as the George Wills and others on the right are half-arguing in their sly, cowardly way, then have the guts to say so, and stop lying about private enterprise.

Maybe a war on poverty would help.

Quote from: lisagurl on February 25, 2009, 08:06:30 AM
Maybe a war on poverty would help.

That sounds almost... bad

It may be the case that wars fuel the economy, but there's more to the story than that.  While defense contractors and those companies tied to providing supplies for the war effort may benefit, the rest of the economic sector (i.e. healthcare, infrastructure, environmental, basically domestic aspects) suffer as a result of said war. 

As the case right now with Iraq and Afghanistan, certain areas of the economy have prospered (Haliburton, defense contractors, Blackwater - now known as Xe - etc.) while others have faltered (the housing crash, the collapse of banks, people loosing jobs, etc.) and suffered as a result of the war.

Obama recently called for an additional 18,000 troops to be sent to Afghanistan.  Which pisses me off.  Bring them all home, including those on illegal, foreign bases (where we have no right to be in the first place), and end the wars.  I don't want to fight anymore, and neither does the majority of the public.  We want (green) jobs, we want to know our homes and money are safe, to have adequate health care, and we want a government that cares more about helping the people more than it does about lining the pockets of big businesses which support the war at the expense of the rest of the country.

Quote from: fae_reborn on February 25, 2009, 09:57:47 AM
It may be the case that wars fuel the economy, but there's more to the story than that.  While defense contractors and those companies tied to providing supplies for the war effort may benefit, the rest of the economic sector (i.e. healthcare, infrastructure, environmental, basically domestic aspects) suffer as a result of said war.

Very true, but inevitably the advances made during a war filter into the rest of the economy afterwards, stimulating growth and innovation for a while. And it's not just the obvious stuff like industrial innovation and technological invention and medical procedures and the like - modern marketing evolved from propaganda techniques developed during WWII, for example.

Unfortunately I see alot of truth in the argument, but it's by no means unique to the US. Rome, The British Empire, the Spanish, China, Japan - all of them grew and prospered only as long as they expended and consumed everything around them. Inevitably they stagnated and floundered when they no longer had more wars to fight and simply got bogged down in hanging on to what they had, wars they lost purely through bogged-downedness.

One would hope that we've evolved past that model for civilization, but yeah, I'm not holding my breath.

Mina.

War is just an easy way to focus energy and resources on a single purpose. 

There would still be innovation and all kings kinds of even better gains, if the resources and energy were to be focused on one or several specific issues or projects.

Quotewhile others have faltered (the housing crash, the collapse of banks, people loosing jobs, etc.) and suffered as a result of the war

The war did not cause the problem. It was caused by people borrowing money to consume and they knew they could not pay it back. Credit cards, mortgages, car loans and bad business models let people live in their fantasy without accepting the physical reality that you can not get something for nothing.

People not acting responsible and lenders and marketing cheering them on.

yeah.  Those people stink.

Quote from: lisagurl on February 25, 2009, 11:46:15 AMIt was caused by people borrowing money to consume and they knew they could not pay it back.

The thing is, they didn't know that, at least not consciously. One of the big reasons this was able to happen was because of the housing boom, so people kept taking out equity against their property in the belief that the increasing value of their property would cover it. Then the oil-price shot into the stratosphere, causing inflation at the pump and thus in everything else, suddenly people were spending too much on living expenses, started defaulting, and it all came tumbling down because the ratio of liquidity to debt had simply gotten too huge because deregulation had allowed lending institutions to take ever more precarious positions by selling debt on as assets.

All we needed was a straw to break the camel's back, and the oil price was it.

Mina.

I disagree, kind of.

When I got my house, I made absolutely certain that the payments were within my means.  WELL within my means.  And, I would never ever take a loan against the house unless it was a health emergency.  Never ever (unless it was a health emergency).

People who bought houses at the edge of or beyond their means should not have even gotten the loans.  And no one should ever borrow against their house for a car or a boat or another house or anything for any reason.  I truly do not understand taking equity from your home.

It is the responsibility of individuals to understand their finances.  Nothing gains value forever.  I don't even understand how anyone could think that.

The banks and the borrowers are at fault.

I feel bad for people but I can't grasp how someone can bring this kind of trouble upon themselves.  I mean, it's different if you do everything responsibly and then tragedy strikes and you get creamed by circumstances.


Live within your means, or else!   

Quote from: Rebis on February 25, 2009, 12:16:10 PM
I feel bad for people but I can't grasp how someone can bring this kind of trouble upon themselves.  I mean, it's different if you do everything responsibly and then tragedy strikes and you get creamed by circumstances.

Live within your means, or else!   

I agree, but when you consider how powerful marketing is, the perceived advantages of social status, that sort of thing, it's easy to get caught up in keeping up. Case in point - my very first real job was as a junior programmer at a startup in Johannesburg. I was driving a beat-up old VW Passat. By the end of the first week I'd more-or-less been ordered to get something more "in fitting with the company's status" as soon I was able, and that the company would help me out once we'd all settled in. According to the boss, the big clients had to perceive you to be doing well in the first place for you to do well with them - the whole confidence game. I didn't last long there ... we had ... creative differences.

I can see how that can easily translate further, where the perception of doing well becomes even more important than actually doing well, because the "confidence" (read jealousy/admiration/whatever) you perceive in you from others not only feeds into your own sense of security, but does actually BECOME a form of security as well. Madoff was only able to get away with what he did for as long as he did because he projected the image of doing well. At a smaller scale, everybody was doing the same as he had been.

Mina.

Quotethe perceived advantages of social status

  LOL, That depends on how stupid the perceiver is. Where I live a dirt poor looking farmer can walk into a John Deere dealer and pull out 200K out of his pocket and buy equipment. In NYC those that wear expensive cloths have a sign on them (Target). The world has gotten much more casual so looks just do not count anymore. I never had a car loan but I have had a 7 brand new cars and kept them for 200,000 miles. I drive a 94 SC400. I could buy a new one but why? As long as it works it is making me money.

Not only in America.
War has always been a great economic boom while it's new, and then the aftermath has always had great potential for companies that work with the reconstruction of that which the war consumed.

The wars should be against poverty, disease, and natural disasters.

Quote from: Rebis on February 25, 2009, 03:31:51 PM
The wars should be against poverty, disease, and natural disasters.

"should" maybe..
But I have to ask actually, how exactly do you propose to fight natural disasters?

My fight against natural disasters beguns thusly:

1. Have some crack teams identify the most possibly dangerous areas where hurricanes, earthquakes, tornadoes, floods, and drought, and all the rest are mostly likely to occur.

2. Find the segments of the earth's population most likely to be affected by these disasters.  Some are common places where disasters occur regularly.

3. Determine if there is a method of gaining the most advanced warning possible.

4. Put resources into construction designed to build stable homes and buildings.

5. Build special places where the population can gather for the most safety possible.

6. Create teams of rescuers who can attend to situations where people can be retrieved.

7. Create teams of engineers who would toss up some temporary structures designed to blunt the effect of the disaster, if possible. reroute floods, or whatever.

8. Have at least 3 classes throughout all students schooling, one in the low grades, one in the middle grades, and one in the high grades, that will teach and train the students for disaster recovery (heh. I just thought of that).  This way, as the years pass, there will be more adults aware of the safety measures and procedures.

9. Have a system by which rebuilding happens as quickly as possible.

10.  Have a nice healthy way of handling large numbers of refugees while they are displaced.

11. Find a way to control the planet's bodily functions.

  This would be a continuing battle.  New technologies needed to handle sick and wounded people. People trained in rebuilding.  People trained as inspectors. Constant retraining.
  Some of these forces would be as flexible as possible. They could be moved around the globe as necessary in order to keep them lean and mean, and experienced.

  People from these Earth Forces would be able to leave the organization with all kinds of technical training and life experiences that would help them be nurses, cops, and firefighters in their communities back home.

any volunteers?

We won't be needing snipers unless the disaster is 10 million bears suddenly going mental.

Quote from: lisagurl on February 25, 2009, 03:19:17 PMLOL, That depends on how stupid the perceiver is.

People can be pretty stupid ...

Mina.

Quote from: Rebis on February 25, 2009, 07:21:52 PM
We won't be needing snipers unless the disaster is 10 million bears suddenly going mental.

Those are all great ideas Rebis, and would probably be a better allocation of resources rather than continuing pointless wars.

War will fuel an economy for a short period of time, but if it continue too long it bankrupts the economy. Every government that tried it too long went under.

But the goverment may use also natural disarsters to abuse power. FEMA's plan for a big catastroph may be quit horrible.