LogFAQs > #986302079

LightningStrikes posted...

Sure, there is absolutely something to the fact that the Republicans have typically made up
for their other spending cuts with increased military spending (Trump less so). However this also gets to why Military Keynesianism is a different economic approach to regular Keynesianism, because one is (in the American context) focusing on military alone while the other is investing in infrastructure and welfare. Related sure but different. The other thing is that Obama used Keynesianism as the response to the 2008 crash while Europe essentially across the board used austerity and the result was a much faster recovery for the US. The EU28 was a bigger economy than the US in 2007, now its well behind. Some are only just now getting back to 2007 levels per capita, others are well behind. Though there are exceptions like economic superstar Poland of course. So Im not sure I quite see your argument. Keynesianism seems to have worked well in the US at least. Which does not even mention how relative to the size of economy military spending has significantly declined as well.

I definitely agree that labels are insufficient. The reality is that every economy on Earth is
mixed to greater and lesser extents. On your second point though Im not sure that holds given that a big part of why the Soviet Union collapsed is that they spent too much on the military!

Military Keynesianism is confusing to me as a term because to me, the central point of Keynes's theory was that governments can generate real value by borrowing against the future to increase spending in the present. This can reduce inefficiencies where a rational player (1) would like to borrow, (2) can repay the debt in the future, and (3) can't borrow because of liquidity issues. A government usually can borrow, so this means that they can borrow on behalf of their people when (1) and (2) are met but individuals/companies lack liquidity.

But if we apply it to the military, (1) will only be satisfied if the military spending is generating value. For the USSR, it wasn't, because given the size of their economy vs. the West, it wasn't possible for them to actually win a war even with the higher level of spending. For the West, probably (1) is satisfied, because the military spending allows the European continent to be free, productive, and allied. The alternative is that the Russians push through to the Atlantic, as in the world of the book 1984.