War and Economy

The Business of War

It seems to be in this day and age that there is a general conclusion that war actually benefits the economy. Through decreasing unemployment by creating jobs as well as allowing those now employed to spend in the retail sector, it may seem as though war is an economic necessity to bring countries out of economic depression. This economic cycle of employment and spending may seem to benefit the economy as a whole, however in reality there is a much different truth to how war effects the economy of every country involved. By preparing for war a country may seem to rise in spirit and growth. What is not taken into account is the money that is spent on the war could have been spent else where, otherwise known as The Broken Window Fallacy. It is hard to tell if war is benefiting the economy as we will never know what the GDP would be if the money spent on the war was spent on things like education, jobs and training which benefit the economy in the long run. A war can only be funded in three ways and none help the economy.

To properly prepare a country for war the government must implement one of three economic actions. They can either increase taxes, decrease spending in other sectors or increase the debt that they are already in. All of these options are detrimental to society, for example, by Increasing taxes consumers will reduce their spending which does not help the economy improve or grow. If the government reduces spending on programs for education or improving infrastructure the benefits of these influential programs will be lost. Programs which help schooling build up society and by spending the money on war the potential of these programs will never be seen. Lastly by increasing the debt means that the country will either have to decrease spending or increase taxes in the future which just delays the inevitable.

At no point is the country going to war able to satisfy the needs of the people as well as the costs for the war. By spending on equipment such as guns, tanks and drones the country is spending on things that will be eventually destroyed in battle and not on things that will benefit their own society. As of December 2006 according to government data reported by the Washington Post, the military stated that nearly 40% of the army’s total equipment has been to Iraq, with an estimated yearly refurbishment cost of $US 17 billion.The iraq war from 2003-2010 was estimated to have cost $3.2 trillion dollars. The budget for the iraq war alone in 2007 was $138 billion dollars, which in turn could have provided Medicare health insurance for all 45 million Americans who are currently uninsured. On the note of education the US could have added 30,000 elementary and secondary school teachers and built 400 schools in which they could teach. They could have also provided basic home weatherization for about 1.6 million existing homes who are currently outdated reducing energy consumption in these homes by 30 percent.

As the country going to war creates jobs and contracts with munitions manufactures as well as research and development it begs the question that when the war is over what will happen to the people employed by the war. It is clear to see that by going to war the economy takes a huge blow to its debt which must be paid off eventually. By increasing this debt overtime the country also takes a large interest on the debt over time. Looking at the US as an example they have been burdened with an extremely large debt which they must now increase because they have reached their debit ceiling. Their very costly war in iraq over the last ten years has attributed to this debt crisis substantially. It is clear that a country at peace is much more economically efficient than one who is burdened with the many expenses of a war.