Re: The Pentagon and Poverty

[pdavidso <pdavidso@xxxxxxx>]

>===== Original Message From Clifford Poirot <cpoirot@xxxxxxxxxxx> =====
>>No I am not assuming full employment. Even at less than full employment
>military spending has a number of negative effects-both short and long run.
>In the short run, it depleats budget resources from the rest of the budget.


If you are not assuming full empployment, then budget"resources" are strictly
a fictious problem.


>Yes, we can run deficits (though I disagree with you, as you are no doubt
>aware, about how large and for how long you can run deficits) but even in a
>world we run deficits, we must still make choices about how to spend tax
>dollars (or are you arguing we have an infinite supply of tax dollars and a
>finite number of projects on which to spend tax dollars?).

I am arguing that until full employment, there is no REAL budget constraint.
As an economist -- don't you agree?

>
>In the long run military spending distorts priorities and locks the economy
>into a path dependent situation in which-to borrow a 1960's phrase-the
>military industrial complex distorts the domestic political debate. It was
>that scion of left wing communism, Eisenhower, who made that point back in
>the 1950's.


Would you prefer recesion-- In the olden days, before the soviet union
collapsed, military spending to dig holes in the ground saand fill them up
with missles that we nerver used-- ids the equivalent of Keynes's filling
holes with town rubbish, etc from the GT.

At least it created jobs and the multiplier spending created jobs in useful
inmdustry outputs.

>
>>We may agree that it would have been "better" if only Bush would have spent
>
>>the money on rebuilding infrastructure, or educating people, etc.,
>
>Yes-I prefer hospitals to tanks.

But if the electorate will be willing to let the Administration spend on tanks
-- and not on hospitals, then what?  Don't spend?


>
> >but in the absense of military spending do you not conceive the
>possibility that >the "deficit" would have been parri passu smaller -- and
>both Democrats and
>>Republicans would have applauded the smaller deficits as more desirable
>than
>>th current deficits.
>
>Let's decid which issue we are arguing about first and foremost-military
>spending or deficits. Surely you are not arguing that if domestic spending
>is not politically possible, we should champion the cause of military
>spending just so we run  a deficit.

Not just to run a deficit -- but to give worker to American workers -- who ten
through the induced consumption spending (multiplier) give jobs to more
people.



>
>I think it would have been politically possible for the President over the
>last four years to have submitted a budget to the Congress that focused on
>transfers to the States.

That's dreamikng in my view!


I am not convinced that a smaller deficit would
>have been a bad thing.



How about less employment and output?  Is that a good thing?

I certainly do not approve of Bush's jokes about
>"hitting the trifecta" and spending money on the military in ways that is
>actually irrelevant to the war on terrorism.
>

Better to dig holes and fillthem up again then to let workers willing to work
stay idle.



>
>>Are you kidding or starry-eyed?  Do you really think the American people --
>
>>including liberals-- would go for more foreign aid to Egypt, etc, while our
>
>>schools, roads, etc are falling apart?

Paul Davidson
Editor, Journal of Post Keynesian Economics
University of Tennessee
SMC 503
Knoxville, Tennessee 37996-0550
office phone #;(865)974-3303; office fax#(865)974-4601
home phone and fax # (561)369-1951
email pdavidson@xxxxxxx
http://econ.bus.utk.edu/Davidson.html