Tuesday, June 29, 2010
Understanding the broader War and Economy picture
War spending should not be treated as a separate, untouchable category -- unmentionable in an economic discussion. The way generals allocate resources on the battle field is but one economic component of the broader national effort to efficiently obtain an optimal over all combination of security and prosperity for the nation. In the real world peace spending and war spending both matter to the economy. To pretend otherwise risks, in effect, losing the war by allowing spending on it to wreck the economy. We must look strategically beyond the tactical requirements of any particular war situation to avoid ruin through foolish misallocation of highly valuable resources be it for entitlements or defense.