Economic Power Posted by Ilan Goldenberg

Matt Yglesias has a great piece today explaining the relationship between the Iraq War and the economic crisis and how the two interplay.  He also managed to find a video that explains the full economic costs of the war which is well worth a watch.  Matt writes:

When the public sector spends money on new rail lines or on educating children, that spending increases the stock of physical or human capital available to the country and allows us to do more in the future. When the private sector spends money on new tractors or office buildings, much the same happens. But the outputs created by military spending can't be used to make additional new goods and services. Instead of being used to generate additional wealthy, much military equipment is simply destroyed as a result of use (in the case of bullets and explosives this is, of course, the whole point), and many of the soldiers fighting the war end up dead or maimed.

I think that's mostly right.  Although there is one exception.  Military R&D spending can sometimes be leveraged into the private sector and can create long-term wealth.  The best example is the internet, which was originally started through investments and technology in the Defense Department.

There's also the question of long term vs. short term security tradeoffs.  The economy acts as the base of military power.  It can be transformed into immediate military power at any time but at a long-term cost of reducing your military power.  A country can invest in its economy in the short-term causing long-term economic growth, which creates a bigger base from which it can invest in military power.  Or, it can invest in military power in the short-term understanding that this will have a cost to it's economy and thus long-term military effectiveness. 

The problem right now with the Bush administration sreategy is that we are investing well over $500 billion per year in defense once you include Iraq and Afghanistan, while China, the country most likely to present a significant long-term strategic challenge to the U.S., invests only $60 billion.  That is a pretty dramatic handicap that we are creating  for ourselves, especially when most of the spending is for weapons programs that might be obselete by the time the Chinese really are ready to compete and the fact that we still hold a dramatic military advantage.

So, what does the right balance between near-term security and long-term economic power look like?  I support the Richard Betts approach

The correct way to hedge against the long-term China threat is by adopting a mobilization strategy: developing plans and organizing resources now so that military capabilities can be expanded quickly later if necessary. This means carefully designing a system of readiness to get ready -- emphasizing research and development, professional training, and organizational planning. Mobilization in high gear should be held off until genuine evidence indicates that U.S. military supremacy is starting to slip toward mere superiority. Deferring a surge in military production and expansion until then would avoid sinking trillions of dollars into weaponry that may be technologically obsolete before a threat actually materializes. (The United States waited too long -- until 1940 -- to mobilize against Nazi Germany and imperial Japan. But starting to mobilize in 1930 would have been no wiser; a crash program in aircraft production back then would have yielded thousands of ultimately useless biplanes.)

This seems utterly sensible.  Invest heavily in a surge capacity that focuses primarily on R&D investments, which have more spillover into the rest of the economy and maintain our long-term economic vitality.  It also has the convenience of not scaring the Chinese into an arms race and forms the basis for a national security strategy that we can actually afford. 

Comments

[wow power leveling]

SEO, search engine optimization. Is to make your Web site or Blog search engines more popular in other search-related content, as far as possible to make your site appear in the results of the first of several. This will bring a wow power leveling lot of traffic, instead of complaining all day: Why am I the one does not see. At present, some of my traffic from search engine Baidu and is the most stable source of traffic. I almost did not do anything, so naturally things happened. If the SEO from the point of view, I probably spent the most stupid and most simple way, but really effective. If the search engine as a beauty, then what is the point of a simple way to let her eyes you see more of it? First, you havewow powerleveling enough fresh interesting. Second, you are unique and eye-catching. Third, you are indeed very interesting new connotation enough to say that the speed of your time in the first issued a message, followed by everyone from here to you, then you are a source of information. Found on the girl has great respect for the source of information, as your grasp, it would wow gold be tantamount to grasp the numerous reproduced the contents of your site. In that case, she must be approved by the Changlaikankan your station. The fastest you that she is from here you get the fastest, so her customers can also receive up-to-date search results. So, note to Mars will not do. The result is you confuse the site in a large site on Mars, found the girl simply can not tell to your face.

[wakfu kamas]

Welcome to our game world, my friend asks me to buy some wakfu gold . I do not know how to use the wakfu money ; my friend tells me how to use. I will thank for my friends bringing me in this world. I am not regret to buy wakfu kama . We all love game, if you want to play it, please buy wakfu kamas and join us. Please do not hesitate to have game.

[Final Fantasy XI gold]

When you have FFXI Gil, you will become strong. With FFXI gold, you can upgrade and admire by others. You can use Final Fantasy XI gold to start the journey of the world. So, do not hesitate, let us move to buy FFXI Gil

[12 sky gold]

I know that 12Sky Silver Coins is your life. So I will try my best and do not let you pass away. In my mind, I think I have 12 sky gold is the fate.

[cheap kamas]

There also have a cheap kamas ,In the game, dofus gold is indispensable.

[archlord online Gold]

Thanks to archlord online Gold let me know a lot of friends. It is my habit to buy Archlord gold.

[sohbet odaları]

This is a very good site..

sonra bedava chat
burasıda var bedava sohbet