Topic: How can war/military spending benefit the economy?

Maytime · June 9th, 2006

Rabs is right, and in fact that is what got us out of the Great Depression as well.

In macro-economics, the total GDP of a nation, used by many to gauge an economy's health based on trends and sheer size, is divided into various kinds of spending and allocations, one of which is G for Government spending. The higher the "G", the higher the GPD, if no other section is changed. Here comes the big BUT. BUT, since G spending does not guarantee an increase in, say, disposable income per capita near the poverty line (low-income households), all it does is drive us further into debt.

What really got us out of the depression was the increase in consumer spending (i.e. more jobs=more $$ to burn), or more specifically, people spending the money they got from their fancy new jobs and pumping it back into goods and services, creating a booming increase in producer profit. Also, when everything produced is used by the government (i.e. military goods), the govt gets a return on their investments, making everyone happy.

Can you believe I hated econ class!

June 9th, 2006
Maytime Centurion	Rabs is right, and in fact that is what got us out of the Great Depression as well. In macro-economics, the total GDP of a nation, used by many to gauge an economy's health based on trends and sheer size, is divided into various kinds of spending and allocations, one of which is G for Government spending. The higher the "G", the higher the GPD, if no other section is changed. Here comes the big BUT. BUT, since G spending does not guarantee an increase in, say, disposable income per capita near the poverty line (low-income households), all it does is drive us further into debt. What really got us out of the depression was the increase in consumer spending (i.e. more jobs=more $$ to burn), or more specifically, people spending the money they got from their fancy new jobs and pumping it back into goods and services, creating a booming increase in producer profit. Also, when everything produced is used by the government (i.e. military goods), the govt gets a return on their investments, making everyone happy. Can you believe I hated econ class! __________________ Trust your hang.