Oh Sweet Keynesian Irony!

Keynesian economics, as it applies to driving GDP growth with government spending, only applies to military spending it seems.  Funny that.  That’s not how I learned it.  But surely that must be true since the defense industry is claiming it to be true.  Just so I understand.

  • Building schools, roads and bridges: Not simulative.
  • Building Bombs, Tanks, Planes: Stimulative.


In a “report” from the Aerospace Industries Association’s mouthpiece, Second to None, our Galtian industrial overlords suddenly discover that cutting government spending on the military will impact GDP.  And not in a good way!  Oh noes!

An economic impact analysis projects more than one million American jobs could be lost as a result of defense budget cuts if the deficit reduction select committee fails to reach agreement on alternative balanced budget solutions and total cuts to defense reach $1 trillion.

But that’s OK right?  Governemnt spending is bad, right? Government spending doesn’t create wealth, right? Government spending is evil, right?.  How are we going to balance the budget during a recession if we don’t stop all this profligate spending?  Except for defense.  Yeah, defense is stimulative.  Erp…

Alice Broke Again!

Oh dear.  Alice has overloaded on illogical anti-Keynesian arguments from the know-nothing right.  What a shame.

The defense industry is urging people to contact congress and demand aggregate (defense industry) demand! Because defense spending is somehow magically stimulative (except when it’s not in the interest of their argument, say like with Robert Barro, for instance).

Perhaps we should get President Obama to bless some other stimulus spending for infrastructure with the magic wand of defense so that members of congress will pass those spending plans too!


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