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Anti Federalist
06-06-2011, 10:28 AM
Krugman: More War!

http://www.lewrockwell.com/blog/lewrw/archives/89288.html

Posted by Lew Rockwell on June 5, 2011 06:34 PM
Writes Andrew Penn Fitzgerald:

Actual quote from Krugman on ‘This Week’ this morning: “If we had the threat of war, had a military buildup, you’d be amazed at how fast this economy would recover.”

And here I thought that we were currently waging offensive war in at least four countries with troops in more than 150 foreign countries and currently spend more on our military than every other country in the world combined. Clearly we just need to do more in the militarist direction (similar to Krugman’s other advice that we throw more money down the bailout hole to make it work).

Golding
06-06-2011, 10:35 AM
I remember back when the Iraq invasion was being sold to the country, this was the same logic that was being pitched. And in my naivety of being almost a decade younger, despite being strongly against Bush and against the war, it was a concession that I was willing to make because everyone knows (or is told, rather) that World War II got the US out of the Great Depression. :/

At least now the economic failures that followed all of this country's other international dalliances can be used as more timely counterpoints. Not that Krugman would ever agree, of course.
http://krugman.blogs.nytimes.com/2008/01/29/an-iraq-recession/

Warrior_of_Freedom
06-06-2011, 10:43 AM
MOAR WAR PL0X. The only sure way to make sure we can't be attacked again is just to kill everybody!

heavenlyboy34
06-06-2011, 10:43 AM
@Krugman-and breaking windows would supply work for the glazier...so what? ;)

ExPatPaki
06-06-2011, 10:44 AM
Sad thing is most people will find Krugman's argument reasonable and sound.

Travlyr
06-06-2011, 10:45 AM
Actual quote from Krugman on ‘This Week’ this morning: “If we had the threat of war, had a military buildup, you’d be amazed at how fast this economy would recover.”
His audience must be made up politicians and military contractors. I fail to see how more warmongering will help the rest of us.

Sola_Fide
06-06-2011, 10:53 AM
Just goes to show that we need a reformation in economic thinking.

NewRightLibertarian
06-06-2011, 11:06 AM
Sad thing is most people will find Krugman's argument reasonable and sound.

Of course. What would this guy have to say in order to lose his influence? 'Debt and inflation are not a problem', 'We need the Fed to create a housing bubble', 'The economy sure could use a huge war!' should be enough for him to be fired and discredited, but people still hang on his every word. It's a shame.

PaleoForPaul
06-06-2011, 11:09 AM
Can we send Krugman?

heavenlyboy34
06-06-2011, 11:33 AM
Can we send Krugman?
I hope so...make him an infantryman. ;) lolz

freshjiva
06-06-2011, 11:55 AM
I might actually support a war if we send Krugman and his minions to the front lines.

LibertyMage
06-06-2011, 01:08 PM
Tube?

JackieDan
06-06-2011, 01:23 PM
what a mud he is. The economy would actually grow faster if he didn't exist..

ababba
06-06-2011, 01:46 PM
It doesn't sound like he is supporting a war, he is just saying what would happen to the economy if there was one. Of course there are also downsides to a war, and he very well might think an additional war is a bad idea.

Dreamofunity
06-06-2011, 01:46 PM
Because you know, why pay any attention to simple concepts presented back in 1850. The broken window fallacy is totally irrelevant.

ClayTrainor
06-06-2011, 01:50 PM
Seems relevant to post this....


KEYNES:

We could have done better had only spent more.
Too bad that only happens when there’s a world war.
You can carp all you want about stats and regressions.
Do you deny that world war cut short the Depression?

HAYEK:

Wow. One data point and you’re jumping for joy.
The last time I checked wars only destroy.
There was no multiplier. Consumption just shrank
as we used scarce resources for every new tank.
Pretty perverse to call that prosperity.
Ration meat. Ration butter. A life of austerity.
When that war spending ended, your friends cried disaster.
Yet, the economy thrived and grew faster.

KEYNES:

You too only see what you want to see.
The spending on war clearly goosed GDP.
Unemployment was over, almost down to zero.
That’s why I’m the master. That’s why I’m the hero.

HAYEK:

Creating employment is a straight forward craft
when the nation’s at war and there’s a draft.
If every worker were staffed in the army and fleet
we’d have full employment and nothing to eat.

Source: http://www.youtube.com/watch?v=GTQnarzmTOc

ItsTime
06-06-2011, 01:52 PM
He also said we needed the housing bubble.

ClayTrainor
06-06-2011, 01:53 PM
It doesn't sound like he is supporting a war, he is just saying what would happen to the economy if there was one.

He's saying the threat of war would be likely to quickly recover the economy. It's an absurd notion on its face.



Of course there are also downsides to a war, and he very well might think an additional war is a bad idea.

If he thinks it's anything but a bad idea in terms of economics, he's pretty much insane.

shocker315
06-06-2011, 01:56 PM
http://www.europac.net/commentaries/why_not_another_world_war


Why Not Another World War?

By: Peter Schiff
Monday, July 19, 2010


There is overwhelming agreement among economists that the Second World War was responsible for decisively ending the Great Depression. When asked why the wars in Iraq and Afghanistan are failing to make the same impact today, they often claim that the current conflicts are simply too small to be economically significant.

There is, of course, much irony here. No one argues that World War II, with its genocide, tens of millions of combatant casualties, and wholesale destruction of cities and regions, was good for humanity. But the improved American economy of the late 1940s seems to illustrate the benefits of large-scale government stimulus. This conundrum may be causing some to wonder how we could capture the good without the bad.

If one believes that government spending can create economic growth, then the answer should be simple: let's have a huge pretend war that rivals the Second World War in size. However, this time, let's not kill anyone.

Most economists believe that massive federal government spending on tanks, uniforms, bullets, and battleships used in World War II, as well the jobs created to actually wage the War, finally put to an end the paralyzing "deflationary trap" that had existed since the Crash of 1929. Many further argue that war spending succeeded where the much smaller New Deal programs of the 1930s had fallen short.

The numbers were indeed staggering. From 1940 to 1944, federal spending shot up more than six times from just $9.5 billion to $72 billion. This increase led to a corresponding $75 billion expansion of US nominal GDP, from $101 billion in 1940 to $175 billion by 1944. In other words, the war effort caused US GDP to increase close to 75% in just four years!

The War also wiped out the country's chronic unemployment problems. In 1940, eleven years after the Crash, unemployment was still at a stubbornly high 8.1%. By 1944, the figure had dropped to less than 1%. The fresh influx of government spending and deployment of working-age men overseas drew women into the workforce in unprecedented numbers, thereby greatly expanding economic output. In addition, government spending on wartime technology produced a great many breakthroughs that impacted consumer goods production for decades.

So, why not have the United States declare a fake war on Russia (a grudge match that is, after all, long overdue)? Both countries could immediately order full employment and revitalize their respective manufacturing sectors. Instead of live munitions, we could build all varieties of paint guns, water balloons, and stink bombs.

Once new armies have been drafted and properly outfitted with harmless weaponry, our two countries could stage exciting war games. Perhaps the US could mount an amphibious invasion of Kamchatka (just like in Risk!). As far as the destruction goes, let's just bring in Pixar and James Cameron. With limitless funds from Washington, these Hollywood magicians could surely produce simulated mayhem more spectacular than Pearl Harbor or D-Day. The spectacle could be televised- with advertising revenue going straight to the government.

The competition could be extended so that the winner of the pseudo-conflict could challenge another country to an all-out fake war. I'm sure France or Italy wouldn't mind putting a few notches in the 'win' column. The stimulus could be never-ending.

If the US can't find any willing international partners, we could always re-create the Civil War. Missed the Monitor vs. the Merrimack the first time? No worries, we'll do it again!

But to repeat the impact of World War II today would require a truly massive effort. Replicating the six-fold increase in the federal budget that was seen in the early 1940s would result in a nearly $20 trillion budget today. That equates to $67,000 for every man, woman, and child in the country. Surely, the tremendous GDP growth created by such spending would make short work of the so-called Great Recession.

The big question is how to pay for it. To a degree that will surprise many, the US funded its World War II effort largely by raising taxes and tapping into Americans' personal savings. Both of those avenues are nowhere near as promising today as they were in 1941.

Current tax burdens are now much higher than they were before the War, so raising taxes today would be much more difficult. The "Victory Tax" of 1942 sharply raised income tax rates and allowed, for the first time in our nation's history, taxes to be withheld directly from paychecks. The hikes were originally intended to be temporary but have, of course, far outlasted their purpose. It would be unlikely that Americans would accept higher taxes today to fund a real war, let alone a pretend one.

That leaves savings, which was the War's primary source of funding. During the War, Americans purchased approximately $186 billion worth of war bonds, accounting for nearly three quarters of total federal spending from 1941-1945. Today, we don't have the savings to pay for our current spending, let alone any significant expansions. Even if we could convince the Chinese to loan us a large chunk of the $20 trillion (on top of the $1 trillion we already owe them), how could we ever pay them back?

If all of this seems absurd, that's because it is. War is a great way to destroy things, but it's a terrible way to grow an economy.

What is often overlooked is that war creates hardship, and not just for those who endure the violence. Yes, US production increased during the Second World War, but very little of that was of use to anyone but soldiers. Consumers can't use a bomber to take a family vacation.

The goal of an economy is to raise living standards. During the War, as productive output was diverted to the front, consumer goods were rationed back home and living standards fell. While it's easy to see the numerical results of wartime spending, it is much harder to see the civilian cutbacks that enabled it.

The truth is that we cannot spend our way out of our current crisis, no matter how great a spectacle we create. Even if we spent on infrastructure rather than war, we would still have no means to fund it, and there would still be no guarantee that the economy would grow as a result.

What we need is more savings, more free enterprise, more production, and a return of American competitiveness in the global economy. Yes, we need Rosie the Riveter - but this time she has to work in the private sector making things that don't explode. To do this, we need less government spending, not more.

heavenlyboy34
06-06-2011, 02:04 PM
lol @ Rosie the Riveter^^ :D That propaganda character always amused me. :) :D

Pericles
06-06-2011, 02:05 PM
Krugman: More War!

http://www.lewrockwell.com/blog/lewrw/archives/89288.html

Posted by Lew Rockwell on June 5, 2011 06:34 PM
Writes Andrew Penn Fitzgerald:

Actual quote from Krugman on ‘This Week’ this morning: “If we had the threat of war, had a military buildup, you’d be amazed at how fast this economy would recover.”

And here I thought that we were currently waging offensive war in at least four countries with troops in more than 150 foreign countries and currently spend more on our military than every other country in the world combined. Clearly we just need to do more in the militarist direction (similar to Krugman’s other advice that we throw more money down the bailout hole to make it work).

I must have slipped into an alternate universe today.

ababba
06-06-2011, 02:12 PM
He's saying the threat of war would be likely to quickly recover the economy. It's an absurd notion on its face.



If he thinks it's anything but a bad idea in terms of economics, he's pretty much insane.

I'm just pointing out how misleading this thread is, saying what would happen to the economy in the case of war is not equivalent to saying that war is good.

ClayTrainor
06-06-2011, 02:25 PM
I'm just pointing out how misleading this thread is, saying what would happen to the economy in the case of war is not equivalent to saying that war is good.

Fair enough. But isn't saying that war would quickly recover the economy, essentially stating that war would be good for the economy?

ababba
06-06-2011, 02:40 PM
Fair enough. But isn't saying that war would quickly recover the economy, essentially stating that war would be good for the economy?

Not really, consumer welfare is important not GDP, all economists would recognize this. War is a primary case in which consumer welfare falls as GDP probably rises.

Krugman's point, I think, is that one should realize that war stimulates GDP, and that knowledge should suggest a large stimulus, spent on worthwhile projects instead of war, would be a good idea.

Travlyr
06-06-2011, 02:43 PM
Krugman's point, I think, is that one should realize that war stimulates GDP, and that knowledge should suggest a large stimulus, spent on worthwhile projects instead of war, would be a good idea.

A good idea for all the well connected folks... that is. Screw the mundanes they are just an annoyance anyway.

Yieu
06-06-2011, 04:31 PM
@Krugman-and breaking windows would supply work for the glazier...so what? ;)

His audience must be made up politicians and military contractors. I fail to see how more warmongering will help the rest of us.

Choice quotes.

If the current wars in 4 middle eastern countries isn't proof enough that breaking windows (war) doesn't help the economy, I don't know what will.

For those unfamiliar with the Broken Windows Fallacy: http://en.wikipedia.org/wiki/Broken_windows_fallacy

The whole article is worth reading, but here is the parable (http://en.wikipedia.org/wiki/Broken_windows_fallacy#The_parable), and here is how it relates to war (http://en.wikipedia.org/wiki/Broken_windows_fallacy#The_opportunity_cost_of_war ).

AGRP
06-06-2011, 04:40 PM
"Need moar war money."

awake
06-06-2011, 04:51 PM
Kill people for a distraction; what a novel idea! Pair this epiphany with James Carville's statement of 'civil unrest right around the corner' and bombs your uncle.

Folks, recognize evil when you see it.

Anti Federalist
06-06-2011, 06:37 PM
I'm just pointing out how misleading this thread is, saying what would happen to the economy in the case of war is not equivalent to saying that war is good.

Oh sweet, bleeding, Jesus Christ.


Actual quote from Krugman on ‘This Week’ this morning: “If we had the threat of war, had a military buildup, you’d be amazed at how fast this economy would recover.”

Economic recovery = good.

Military build up and threat of war = economic recovery.

Therefore, war or the threat of war is good.

And that is insane...

ClayTrainor
06-06-2011, 07:04 PM
Economic recovery = good.

Military build up and threat of war = economic recovery.

Therefore, war or the threat of war is good.

And that is insane...

Word!

cindy25
06-06-2011, 07:12 PM
@Krugman-and breaking windows would supply work for the glazier...so what? ;)

they find it reasonable because they are taught that FDR ended the depression with WWII