U.S. War Machine Powers Economic Recovery

U.S. War Machine Powers Economic Recovery

When the Berlin wall fell in 1989, the Soviet Union was extinguished. Provinces broke off, and what was left became Russia. It was a fresh start, a clean beginning from the Cold War and the arms race. They couldn’t keep up the level of military spending, and were forced to pull it back.

The U.S. wasn’t. We were able to sustain a bloated defense budget past the fall of the Soviet Union, and through the 90′s. Clinton flatlined overall military spending; from ’92-’00, the pentagon’s budget rose only several billion dollars. But besides flatlining overall spending, Clinton did little else to turn the United States away from it’s militaristic stance. Instead of, say, diverting money away from lateral U.S. nuclear proliferation and an unworkable missile defense program into social programs, he left hawkish pentagon officials in charge to do as they pleased. The U.S. war machine rumbled onward during the 90′s.

Now, as the fourth quarter of 2003 comes to a close, and the economy shows signs of a recovery, George ‘Dubya’ Bush is quick to attribute his tax cuts as the root cause. But Kent Sims, San Francisco economic consultant and public policy expert, concludes that “… There is no legitimate economist on the face of the earth who doesn’t say the tax cuts are just loony.”

In Andrew Gumbel’s article in The Independent, he comes to the conclusion that the actual stimulus is the war in Iraq, and the benefits that have occured in the military complex.

“During the second quarter of 2003, when the war in Iraq was in full swing, some 60 per cent of the 3.3 per cent GDP growth rate was attributable to military spending.”

60% of the growth rate was solely military spending. California, which is always one of the earliest states to be affected by booms and slumps, is home to Northrop Grumman, the main company contracted for the pentagon’s 4 billion dollar missile defense system.

George ‘Dubya’ Bush is running a huge deficit (estimated to be at $500 billion in 2004) by pouring money into the pentagon. Grumbel calls the economic system that Bush is hedging on “Military Keynesian.”

Instead of traditional Keynesian economics, growing the government and producing a deficit by public works and social programs, Military Keynesianism focuses on pouring money into military sources, such as the war in Iraq. This benefits the military industry, and all of the large corporations that run it (Lockheed Martin, Northrop Grumman & Boeing come to mind). This economic theory was first produced by Polish economist Michal Kalecki in 1943. The best example of Kalecki’s Military Keynesianism at the time? Nazi Germany.

The end result of such policies? Short-term economic gain, large deficits, and floundering social programs. As schools, hospitals, police forces, and other domestic, social spending continues on underfunded, budgets cuts will be quick to follow. The resulting damage to such public infrastructure is, of course, vital to the neo-conservative agenda (Texas Republican Party Platform) of shrinking all aspects of government besides the military arm.

Military Keynesianism will get Bush re-elected, as the economy rebounds for the 2004 election. But the massive deficits that Bush is running could quickly spin out of control and hit Reagan-era levels. The debt will be compounded and future generations will pay the consequences.