RE: [OPE] Studying unproductive labor: CEPR report

Date: Wed Feb 27 2008 - 09:23:37 EST

> The Economic Impact of the Iraq War and Higher Military Spending> May 2007, Dean Baker>> Quote:> "Military spending drains resources from the productive economy. For> this reason, it will typically lead to slower economic growth, less> investment, higher trade deficits, and fewer jobs."
Hi Dave Z:
The same argument could be extended to the
consequences of just about any increase in government spending.
What is curious here is the apparent lack of recognition that
increased government spending, including increased spending
on the military, can increase employment, income, and 
spending in the macro economy.  It's almost as if he is making
a pre-Keynesian claim and thereby failing to recognize the 
role that fiscal policy (not to mention the "multiplier") can 
play in short-run macroeconomic activity.
In solidarity, Jerry

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