How a Mitt-Style Increase in Military Spending Might Cost You Your Job
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As predicted, one of the big clashes in the final presidential debate on Monday night concerned military spending. The dustup not only revealed a key difference between the candidates, it gave us the best line of the night, Obama's quip that we no longer rely on horses and bayonets.
When it comes to federal spending, the choices we make reflect our national priorities. If you listened to Mitt Romney during the debate, it was pretty clear what his priorities would be if elected. He could not hide the fact that when it comes to spending, children, education, eldercare, trains, roads, technology, research – in short, the things that make life livable at home – will take a backseat to fighting foreign wars abroad and pumping up an already bloated military budget. He vowed to raise military spending by an additional $2 trillion, an increase the military hasn’t even asked for. In other words, he wants to spend more regardless of need.
But here’s what he really didn’t want you to know: Increased military spending could land a pink-slip on your desk.
A little history: Military spending by the United States has skyrocketed in recent years. According to the Center for Arms Control and Non-Proliferation, the defense budget expanded from $432 billion in 2001 to $720 billion in 2011, an increase of around 67 percent. Much of this increase has been in reaction to the attack on 9/11. Sadly, instead of making us safer, this trend has weakened the economy and left us far less secure in our daily lives.
Budget experts and economists have long been calling for an end to this hideous misuse of resources. Joseph Stiglitz, 2001 Nobel Prize winner in economics and Linda J. Bilmes, a Harvard University senior lecturer in public policy, have spoken plainly about the problem and co-authored a book called The Three Trillion Dollar War: The True Cost of the Iraq Conflict, in which they sum up the folly of that military adventure:
“There is no question that the Iraq war added substantially to the federal debt. This was the first time in American history that the government cut taxes as it went to war. The result: a war completely funded by borrowing. U.S. debt soared from $6.4 trillion in March 2003 to $10 trillion in 2008 (before the financial crisis); at least a quarter of that increase is directly attributable to the war. And that doesn’t include future health care and disability payments for veterans, which will add another half-trillion dollars to the debt.”
Stiglitz has also shown how these unnecessary wars fought on credit are directly related to unemployment. The Iraq war exacerbated the deficit and increased the cost of oil, which meant that people had less money in their pockets to buy American goods. That, in turn, dampened company profits, a trend that inevitably leads to layoffs. For a while, Federal Reserve hid the weakness in the economy by blowing up a housing bubble that fueled a consumption boom – and we all know how that turned out: Millions of indebted Americans who were wiped out once the financial crisis finally exploded and jobs evaporated from coast to coast.
Economist Dean Baker has similarly discussed the link between increased military spending and job loss:
“Defense spending means that the government is pulling away resources from the uses determined by the market and instead using them to buy weapons and supplies and to pay for soldiers and other military personnel. In standard economic models, defense spending is a direct drain on the economy, reducing efficiency, slowing growth and costing jobs.”