Confirmed: Defense Spending Creates Fewer Jobs Than Other Types of Spending

George Washington's picture

Yesterday, I pointed out
that a study by one of the leading economic modeling companies shows
that military spending increases unemployment and decreases economic

Indeed, an economic paper
published in 2007 by The Political Economy Research Institute at the
University of Massachusetts, Amherst - entitled "The U.S. Employment
Effects of Military and Domestic Spending Priorities" - concludes:

present in Table 1 our estimate of the relative effects of spending $1
billion on alternative uses, including military spending, health care,
education, mass transit, and construction for home weatherization and
infrastructure repair.

[Click for larger image]

table first shows in column 1 the data on the total number of jobs
created by $1 billion in spending for alternative end uses. As we see,
defense spending creates 8,555 total jobs with $1 billion in spending.
This is the fewest number of jobs of any of the alternative uses that
we present. Thus, personal consumption generates 10,779 jobs, 26.2
percent more than defense, health care generates 12,883 jobs, education
generates 17,687, mass transit is at 19,795, and construction for
weatherization/infrastructure is 12,804. From this list we see that
with two of the categories, education and mass transit, the total
number of jobs created with $1 billion in spending is more than twice
as many as with defense.

"Military Keynesianism" - the idea that war is the best economic stimulus - is false.

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loup garou's picture

AHA!  I see the problem -- that study was published in 2007, when Bush was president!
Give it a little more time, GW. Now that Obama is prez, they’ll come out with a new study showing that Iraq and Afghanistan have “saved or created at least a gazillion jobs”.

Seriously, though; at least there is a constitutional basis for spending on national defense. And I’m not aware of anyone making the assertion that we need more military spending to revive the economy and/or create jobs.  (?)

jippie's picture

Defense spending is insane.

It's the only activity in the world wher wealth is literally destroyed!

I mean where else do you spend money just to blow it up.


Completely insane

Anonymous's picture

Compare, for a moment, the average wage of a defense contractor and that of the average wage of a teacher, bus driver, or road worker. I think you need to consider total capital asset developed. Engineers hire maids to clean their houses, they buy 40,000 cars (and can afford them). Defense contractors create the middle class you want, not 40k droans that don't put very much capital asset back into the economy.

Tax Man's picture

I miss one alternative: Spend 1B extra on additional screening at the airports. In economic terms, I guess that all the money spent after 9-11 on additional security and AT defence had the same effect as one giant stimulus package. No wonder the economy boomed to a bust.

One Eyed King's picture

This study supports the conclusion that military spending is not the best economic stimulus. War and military spending are not one and the same.

Anonymous's picture

I am shocked a self proclaimed "progressive" think tank comes to the conclusion that spending money on public transportation generates more jobs than military spending. They also think that replacing cheap existing energy infrastructure with new expensive "green energy" creates jobs and grows the economy.

Paul S.'s picture

Don't these contradict each other?  First you said military spending increases unemployment then you post this which says 1B in spending creates 8000+ jobs (granted a nominal amount relative to spending).  Both you say vindicate your stance, although I'm not sure what that is now.