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Photo: Truthout.org / Flickr
Apparently military contractors hold an especially warm place in the hearts of the Washington Post editors. How else can one explain another story devoted to the fact that they will lose money and reduce employment if the military cuts slated to go into effect in January actually occur?
Some folks may recall a major news article the paper ran last month that was devoted to a study commissioned by military contractors that hyped the job loss that would result from these cuts. Of course in a downturn like the present one, any cuts in government spending will cost jobs.
The logic is fairly simple, the government spending is hiring people, both directly and indirectly. It hires people directly because workers are being paid to teach, build roads, or build bombers. It hires people indirectly because these workers will then spend most of their pay at grocery stores, restaurants and other places where their spending will help to employ people.
If the economy were close to full employment then government spending could be seen as crowding out private spending, primarily by raising interest rate. However, we are not close to full employment, so cuts in government spending will cost jobs. It is that simple.
So just keep saying that until its clear: cuts in government spending (military or otherwise) cost jobs. Don’t waste anyone’s time talking about the budget and the economy until you understand this point. And when you do, please tell the WAPO to stop highlighting the whining of military contractors who seem to think the government owes them contracts.
Dean Baker is co-director of the Center for Economy and Policy Research. He also writes a regular blog, Beat the Press, where this post original appeared.
6 Comments
IIRC, the last contract for airplanes was with a foreign country, it was not with Boeing. So maybe they can do extreme cutbacks with foreign contractors? Rumsfeld was on tv (around the time of the GOP primaries IIRC) wanting the military budget raised from 4% to 10%. They want the Social Security and Medicare money for their never ending military wars.
What percentage of the military budget is spent overseas (foreign countries) vs military spending in US? Any one know? And I’m speaking of all half a dozen or so ways the military get their money.
Personaly, I think we should replace the military with some kind of “Peace and Compassion” agency.
This opening sentence from the WAPO article says it all:
“Find another way”
We could have direct government employment to build a world-class transportation system, education health care system, but nooo…
When are we going to wake up?
Full employment!
HEIDI GARRETT-PELTIER, Assistant research professor at the Political Economy Research Institute at the University of Massachusetts, Amherst and co-author of the report “The U.S. Employment Effects of Military and Domestic Spending Priorities: An Updated Analysis,” Garrett-Peltier said today: “My calculations show that the arms industry’s claims about increased unemployment are vastly exaggerated. A billion dollars spent on military production created about 11,000 jobs, compared to about 17,000 from clean energy, 19,000 from health care, and 29,000 from education.”
hpeltier@econs.umass.edu , http://www.peri.umass.edu/nc/201/?tx_peripubs_pi1author_id=173 000 from health care, and 29,000 from education.”
Hallmark should unveil a new holiday — Love Your Defense Contractor Day — celebrated around Groundhog Day.
How could this be? The Government doesn’t create jobs.