By Dan Beaulieu
I have heard many people say that with our economy in turmoil that brining home nearly a million troops would be disastrous to our unemployment. That somehow having our troops overseas is economically beneficial, ignoring the obvious costliness of the war. This notion is derived from the negligence of the arguer only looking at one side of the process, that is, soldiers being turned loose on the labor market.
Take into consideration the hundreds of billions we spend on these wars per year. This money doesn’t come into existence from thin air; it’s taken from the tax payers. Now as long as the government does not intervene by trying to provide compensation for the soldiers through taxing the people, the taxpayers retain more wealth than previously. This means that the taxpayers have additional funds to spend on products, food and businesses. This creates demand and ultimately higher productivity, more workers are needed. This process, as history shows, is rather fast.
Once demand puts the soldiers (now civilians) back to work, they not only become self-supporting they, with a steady paycheck, begin consuming more and the need for production rises further. Higher overall productive output results in increased national wealth. That said, we would be in a much better economic state after our troops come home.
This thought process is rudimentary economics and can be found in Henry Hazlitt's book titled, "Economics in one Lesson".
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ReplyDeleteAli mudeen