Military spending not investment?

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dthomas2325's picture
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Joined: Feb 18 2011
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Military spending not investment?

Military spending is given as an example of non-self-liquidating debt; as an example of debt that is not for investment BUT I submit that military spending does have a return if, for example, it secures natural resources or just discourages an attack on, say, the World Trade Center. Don't get me wrong, I think America spends too much on the military AND attempts to accomplish too much with its military - but the idea that there is no investment return on any military spending is, in my opinion, an error. Another error is to consider a car as having no investment return when it may be needed to get to a job which provides the income to self-liquidate the debt. Again, we spend too much on cars, we buy too many, too big too often BUT they are not always non-investment spending. Dana

sevenmmm's picture
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Joined: Jan 19 2011
Posts: 108
Re: Military spending not investment?

Money spent on the military to secure resources is a malinvestment. It artificially lowers the cost that stifles innovation.

silvervarg's picture
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Joined: Mar 28 2010
Posts: 57
Re: Military spending not investment

I do agree partly with Dana on the investment part.
Lets try to balance creafully not to bring any politics into this and only adress the objective questions.  

The fundamental idea with an investment is that it should over time give a return that is greater than the investment.

A car that takes you to and from work may be a neccessary cost to allow an investment in a job to pay off.
So, the car itself might be a cost, but it is needed to make another investment work.
You choose to have the car as a part of the "job package", a slightly differnt view from mine, but I fully understand the reasoning.

Every country in the world has a military, either its own or is controlled by some other military. It may be through an agreement or as a regular occupation or takeover.
With that in mind I argue that military to defend your countries resources is a neccessary cost.
To minimize these costs most countries have agreements with other nations to share much of the costs (e.g. NATO).

US and a few more countries has decided to act far outside its countries boundaries, and this increases the costs drasticly.
If US just keept a military capable of defending US teritory it could cut costs to a fraction of what they have today.  

The main question is if and to what extent costs for military that is not ment for defending your own teritory is justified.
Unfortunately I don't think this can be answered without tripping over the knife-edge to the politics side.
Questions like control over oil resources is constantly on the news lately.
One thing that is often left out in the debate is the time issue. Scaling down the military can be done fairly quickly, but scaling back up again takes a long time.
Looking at history most European countries was shocked when world war I started (1914), and started to scale up military shortly after.
By the end of WWII (1945) none of the countries had finished the scale up.
So the argument that it takes about 30 years to scale up means you need to look about 30 years into the future when you take the desicion to scale down.
With rapid changes today we are lucky to be 50% correct on predictions 10 years into the future. What hitrate can we expect 30 years into the future?

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