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Defense Spending as Jobs Program

[ 11 ] November 29, 2011 |

New study out of UMass-Amherst affirms the obvious in a methodologically rigorous way:

Congressional debates on deficit reduction have highlighted the assertion that large cuts in the military budget would produce negative impacts on jobs in the U.S. economy. The Pentagon itself suggested that military cuts in the range of $1 trillion over the next decade would add one percentage point to the U.S. unemployment rate. But whether or not this particular forecast is accurate, the most important question is not the absolute number of jobs that are created by spending a given amount. It is rather whether spending that money on the military creates a greater or lesser number of jobs relative to spending the same amount on alternative public purposes, such as education, health care or a clean-energy economy, or having consumers spend that amount of money any way they choose.

As Pollin and Garrett-Peltier show, in comparison to alternative uses of funds, spending on the military is a poor source of job creation. They find that $1 billion spent on the military will generate about 11,200 jobs. By contrast, spending those funds on alternative purposes would create 15,100 jobs for household consumption, 16,800 jobs for clean energy, 17,200 jobs for healthcare, and 26,700 jobs for education.

Here’s the “but.” Defense spending is a radically inefficient way of generating jobs through government spending. However, it’s by no means certain that any money cut from the defense budget will actually be applied to, well, anything. Defense spending acts as a mild stimulus; when stimulus is hard to come by, policymakers have to take this effect seriously. Moreover, substantial cuts to the defense budget (which I heartily favor) will without a doubt eliminate many solid, well paying manufacturing and service jobs. No such thing as a free lunch, and all that.

Comments (11)

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  1. DrDick says:

    As I recall, there have been a number of such studies over the years to measure the economic multiplier effect of military spending versus other forms of government spending and the military always comes in dead last, often by much larger margins than here. While I would like to see the defense budget slashed by 1/2-2/3, I have no confidence that the money would go to more productive spending and not to tax cuts for billionaires.

  2. Joey Maloney says:

    Yes, surely this can’t be the first time an assessment of this sort has been made. I recall numbers like this being cited back in the 1970s and 1980s when I was organizing around social justice and later Latin American interventionism.

    I expect this study to have exactly as much effect on the public debate as the previous ones.

  3. c u n d gulag says:

    The jobs lost in the MIC could, in a sane country, be replaced throughout the years by careful planning and budgeting, and redirecting the resources and people towards researching and building more and better green energy and the ways to distribute and store it, and in rebuilding and expanding infrastructure.
    We need to drastically re-engineer how we get and use all energy; how we travel; how, why and where we work and live.
    In the coming environmental crisis, water will be a major, major issue. Particularly for CA and the SW states, and how and where they get their water from. The opposite will be true in coastal states, where rising sea levels, and increased rain will create a whole other problem. We need to plan for how we handle all of that.
    So, if we cut the military budget by 50-75% over the years, there will be plenty of money to pay for the work we’ll need to do for research, planning, and actual labor. These were all once strength of this nation back when it was saner.

    But, we don’t live in a sane nation.

    Common sense and proven science and economics are denied.
    And therefore, the Christians among us had better be right, that Jesus will come to save us.
    We’ve proved we can destroy ourselves without his and the four horsemen’s help.

  4. They find that $1 billion spent on the military will generate about 11,200 jobs. By contrast, spending those funds on alternative purposes would create 15,100 jobs for household consumption, 16,800 jobs for clean energy, 17,200 jobs for healthcare, and 26,700 jobs for education.

    And we’re spending in the neighborhood of seven thousand $billions on the military. Surely, we can shift at least a few of them.

  5. cleter says:

    Well, if it’s purely a jobs program, why don’t we just start making B-17s again? That employed a hell of a lot of people. If we’re going to make military stuff we don’t need we could at least make cool stuff. Maybe we could start making Yorktown-class carriers, too.

  6. Anonymous says:

    We are all Keynsians now, apparently.

  7. jon says:

    Cutting military funding doesn’t mean that money would be shifted to other expenditures. But it does mean that other department and agency funding would not need to be cut as deeply, thereby maximizing productive expenditures and employment.

  8. [...] Spending as Jobs Program (Lawyers, Guns & Money) A study finds that expanding the Pentagon’s budget is a pretty terrible way to stimulate job [...]

  9. [...] Defense Spending as Jobs Program : Lawyers, Guns & Money Congressional debates on deficit reduction have highlighted the assertion that large cuts in the military budget would produce negative impacts on jobs in the U.S. economy. The Pentagon itself suggested that military cuts in the range of $1 trillion over the next decade would add one percentage poin… [...]

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