Via Big Picture, Barry Ritholz points us to discussion on the role of ‘war’ in our economy:
Preface: Many Americans – including influential economists and talking heads – still wrongly assume that war is good for the economy. For example, extremely influential economists like Paul Krugman and Martin Feldsteinpromote the myth that war is good for the economy.
Many congressmen assume that cutting pork-barrel military spending would hurt their constituents’ jobs. And talking heads like senior Washington Post political columnist David Broder parrot this idea.
As demonstrated below, it isn’t true.
Nobel-prize winning economist Joseph Stiglitz says that war is bad for the economy:
Stiglitz wrote in 2003:
War is widely thought to be linked to economic good times. The second world war is often said to have brought the world out of depression, and war has since enhanced its reputation as a spur to economic growth. Some even suggest that capitalism needs wars, that without them, recession would always lurk on the horizon. Today, we know that this is nonsense. The 1990s boom showed that peace is economically far better than war. The Gulf war of 1991 demonstrated that wars can actually be bad for an economy.
The whole post can be read at The Big Picture.