Bruce Barlett's Keynesian claims in the New York Times
Republicans have been warning about the loss of jobs from cuts in military spending for some time. At a hearing last October, the House Armed Services Committee chairman,Howard P. McKeon, a California Republican, said, “Defense cuts are certainly a path to job loss.” The committee’s blog often highlights the loss of jobs from military spending cuts. . . .
Historically, economists have believed that government consumption and investment spending has the same impact on jobs and growth whether it’s for military or domestic purposes. As Paul Samuelson, the Massachusetts Institute of Technology economist, put it in his best-selling economics text: “There is nothing special about G spending on jet bomber and intercontinental missiles that leads to a larger multiplier support of the economy than would other kinds of G expenditure.” . . . .
World War II ended the Great Depression. . . . .
Indeed, some economists have argued that military spending has in fact been the primary vehicle through which Keynesian economics has operated during the postwar era. The reason is that conservatives who routinely denounce government always give a pass to military spending. . . .
It is clear in today’s world that national defense does not consist only of bombs and rockets. Adequate public infrastructure, a well-trained labor force that can produce soldiers capable of operating high-tech weaponry, and a strong economy are as important as the traditional tools of war, or more so.
This strong Keynesian claim by him is very disappointing. I wrote this on Bruce's Facebook page.
Bruce, what is all this Keynesianism that you are pushing these days? Do you really believe that government spending increases wealth? Don't you acknowledge that the money has to come from someplace else? Why does moving money from where you and I would have spent it to where the government would spend it increases wealth? Are you going to make some Keynesian claim about different marginal propensity to consume? Don't you recognize that all the money people have is essentially spent? If you put your pay check in the bank, either you spend it on the mortgage or car or food or the bank buys bonds or lends out the money. To believe the typical MPC argument you would have to believe that saving is the equivalent to throwing money in a hole in the backyard. I thought that the writing here is a bit overstated. "Republicans have been warning . . . Historically, economists have believed . . . ." Have you heard of Milton Friedman? All Republicans? Why such categorical statements?