Military Keynesianism Gone Haywire: Paul Krugman Pines For World War ... Based On Ginned-Up Reasons

George Washington's picture

By Washington’s Blog 

As I have repeatedly documented, influential Americans are lobbying for war in order to save the American economy - what is often called "military Keynesianism".

For the first couple of years that I wrote on this topic, commenters more or less said, "That's crazy, no one is calling for war to stimulate the economy".

When allegations surfaced that Rand Corporation was lobbying the Pentagon to start a war to save the economy, Washington Post hack David Broder started promoting war as an economic panacea, and former Goldman Sachs analyst Charles Nenner and economist Marc Faber started predicting a major war, people started paying more attention.

And well-known economist and writer Paul Krugman has argued for years that World War II is what got us out of the Great Depression.

For example, Krugman writes today in the New York Times:

World War II is the great natural experiment in the effects of large increases in government spending, and as such has always served as an important positive example for those of us who favor an activist approach to a depressed economy.

But Sunday, Krugman went over-the-top by more or less calling for a major war ... and manufacturing a false justification for starting one, if need be:

If we discovered that space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months. And then if we discovered, oops, we made a mistake, there aren’t any aliens, we’d be better.


There was a Twilight Zone episode like this in which scientists fake an alien threat in order to achieve world peace. Well, this time…we need it in order to get some fiscal stimulus.




This statement is disturbing for two reasons.

First, many economists have demonstrated that - contrary to commonly-accepted myth - war is actually bad for the economy.

And the following statement by Mr. Krugman implies - whether intentional or not - the use of hanky panky to justify military spending:

And then if we discovered, oops, we made a mistake, there aren’t any aliens, we’d be better.

Doesn't Mr. Krugman know that governments from around the world have admitted that they carried out "false flag" attacks in order to justify their aims? See this and this.

How can he be so irresponsible to publicly pine for all-out war based upon ginned-up reasons?

Postscript: There have been Internet rumors floating around for years that the government was planning to use a "faked alien invasion" to justify a power grab by the government. I have no idea whether or not that rumor has any truth, and it is irrelevant for the purposes of this post.

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rwe2late's picture


It is debatable whether attempting to prop up an economy by military spending should most accurately be called “Keynesian” or something else.

Keynesian or not, spending on battleships is just as much an expression of a profit-driven market as anything else. What can be meant by a free market if not free profits?

Business profits can be made by ruining forests, rivers, and oceans. Profits can be made by destroying the fisheries and polluting the air. Profits can be made by financial parasitism. Profits can be made by sweatshops, child labor, and poisoned foods. And profits can certainly be made by preparing and making wars. Micro profit, it seems, does not measure the environmental losses to society, nor the debilitation and destruction of human beings. Should not we then also disregard all such hindrances to profit?

At the prospect of such a “free market”, some proponents shrink and say they did not mean for the market to be quite that free. There must be control, even a government.

It is then the “free market” purists step forth and declare any control to be a contradiction, the profit-motivated markets cannot be operate freely if there is any control. All government is theft, they say, without saying exactly from whom. But not to worry they say, a purely free profit-driven market will transform all man’s vices into virtues. All organizations formed to rape the environment and plunder others will no longer wreak havoc or persecute their neighbors, no matter what profits might be made by doing so.

Corporations are the apex organization of a profit-driven economy. They are autocratic, secretive, one-dimensionally goal seeking, and have no intrinsic qualms about removing any obstacle to the achievement of their goal.

And the apex type of government sought by profit-driven corporations is one that adheres to their singular interest. The best government for such purpose is one they can assimilate and use. It is one much like the corporations themselves, autocratic, secretive, without qualms, and given to promoting business (aka profits) as the ultimate cure for all ills.

As apex organizations, do they not embody the principle of survival of the fittest?

Are they not most efficient at securing profits for themselves?

It is well recognized that the lowest wages, the least worker benefits, the absence of environmental restrictions, no taxes, and no government accounting results in the maximal business profits on the micro scale. Should we not strive then to effect all those circumstances in the belief that the micro activities of a free-profits market will consequently create the best of all possible worlds?

So let us embrace a system based on maximizing work, maximizing production, maximizing consumption. Let profitability arbitrate our conduct and profitability judge the value of all that is in the world. Let us abhor leisure and have profit-making determine the quality of all life, human or other.

And should any oppose the freedom to do everything and anything (including wars) for profit, let them try standing in the way.


AnAnonymous's picture

That is the result of Smithian economics.

rex-lacrymarum's picture

Acting Man on Krugman's space alien fantasy

and on the myth of war prosperity:

stiler's picture

this is how you know a theory is KAPUT...Keynesianism linked ^ space aliens. It reminds me of the Evolution theory. They finally gave us the trans-spora idea that life came to earth via aliens. Desperate.

stiler's picture

actually, we came out of WWII with the most debt ever, just like after the Revolution and Civil War and the resilient US economy still did well despite, which is prob why there are Keynesians. 

fbachan's picture

WW2 was definitively positive for US economy - the rest of the world committed harakiri and America's untouched industrial base and banking system provided them with everything they desperately needed including stable money. On the other hand WW2 was not so great for Germany, Japan, UK, Russia, ...  Germany's GDP fell virtually to zero in 1945 - is that what Krugman wants?!! :)

And that's the point - for you to profit from the war, you must stay out of it and wait for the others to kill each other. Then you can heal your macroeconomy on their expense.

JW n FL's picture

CBS13: Man Charged With Threatening BART Officer On Trial

WSLS10: Feds indict Roanoke man for internet death threat

Wired: FBI Arrests Man for Online Threat Against Indicted BART Cop

SFGate-M&R: Death threats against BART officer

Western District of Virginia: Roanoke Man Indicted for Sending Threat

Alex Jones works with / for the FBI.. aliens / tin foil hats and then he talks about the truth of our economic circumstance. Alex Jones is a plant who detracts from the truth, Alex Jones is NOT on "We the Peoples" side..



On June 11, 2009, Jeffrey Weaver was criminally indicted for statements he posted to that threatened a California transit police officer and threatened the officer's family. is a website run by talk radio host Alex Jones.

According to the affidavit by the FBI officer who investigated the case, on January 7, 2009, an anonymous poster using the name "FuckThePIGS" posted a comment on that identified Officer Johannes Mehserle by name and address, and made threatening statements about killing officer Mehserle and his wife and baby. Officer Mehserle is a former Bay Area Transit Authority (BART) officer who has been criminally charged for a controversial shooting in January, 2009, that was caught on video.

Using IP records provided by an InfoWars administrator, the FBI was able to identify the poster as Jeffery Weaver, of Roanoke, Virginia. Weaver was indicted in the United States District Court for the Western District of Virginia.

On August 14, 2009, Weaver pleaded guilty to one count of transmitting in interstate commerce a threat to injure a person, as well as one count of willful copyright infringement. His sentencing hearing is set for December 14, 2009.

·         Related Links:


One Less hopeless, unemployed, futureless Young Black Man in the World score one for the Nazi Pigs!

that's ok!

People are shooting back!


LiquidDreams's picture

Do people have any reading comprehension skills? He is not pining for war. He is using the biggest gov't spending program (stimulus) to make the point that the US needs to use stimuli to increase aggregate demand. 


I am not saying he is right. But the fear mongers claiming Krugman is hoping for World War III, are misguided, at best. Instead of addressing the economic points he makes about huge government spending programs getting the country out of the great depression, they use fear to try and discredit that. There is much more utility in actually debating the economic ideas. But that would actually involve thinking.

steelhead23's picture

OK LD, let's debate the role of Keynesianism in the current economic environment.  The simplistic Keynesian view is to use government spending to take up the slack in consumption, so that idled productivity could be rekindled and expansive monetary policy to generate inflation.  I believe that in the past, Keynesian solutions have worked.  But, in our current situation, the government spending stimulus stimulates growth in our trading partners and accumulates debt here at home.  And expansionary monetary policy is creating bubbles that are diminishing investor confidence.  Yet, Mr. Krugman, living in the past, sees nothing but bright red roses enshrining Mr. Keynes.  Like many others, I am not saying that Keynes was wrong, in truth, I am saying that the past 30 years of anti-labor policies have so severely undermined the U.S. economy that counter-cyclical fiscal and monetary policies are something like treating the cancer patient for toothache - it might make him feel a little better, but he's still dying.  Krugman is absolutely oblivious to these facts.

What truly needs to happen is for the U.S. to rethink its economic policy.  The U.S. should adopt a full employment model of the American Dream (as opposed to the "ownership society" model) and develop policies to make that dream come true.  It is completely doable, but virtually no one is talking about it.

Joebloinvestor's picture

All one has to do is look at what the "Global Warming" fear mongering did for the economy .


Hey Paul!


Here is your manufactured "crisis".

israhole's picture

Krugman is a creep.

cocoablini's picture

Wow-does the Nobel economics parrot know we are fighting 2 wars and killing 100,000s?

gangland's picture


6 wars and add a zero to the kill count, there fixed it for ya.

blindman's picture
Blade Runner
deckaed is himself a replicant?
"how can it not know what it is?"
re krugman comments. he has no vision and
does not know, is perhaps incapable of knowing,
what he is. "money" is the meme by which the animal
man feeds on his fellows, in debt. it is just the
"money" system functioning as designed by the banksters.
that humanity at large cannot fathom this cruelty and
hypocrisy and insanity dooms us all to lives spent and wasted
in a hell realm of our own design. no vision. we are blind
and stupid and will die distracted following their twisted
tangents and dead end rationalizations and arguments.
any cause could eliminate the slump, it does not have to be
war. this is so because the money system is arbitrary and
money is created out of thin air, just like war for the many
and money for the few. the only problem is that
the infrastructure is obsolete and misaligned with the contemporary
energy realities.
the elites are so stupid that their only response to the present
dilemma is to horde more of what they don't need which will just
destroy the value of what they have. then they will set about
financing the murder of their own kind to satisfy the math of
the failed ponzi money system, cravenly with degrees in various
schools of economics. they make the most simple complex to
obfuscate theft and murder by the well to do. it pays well.
Delusional Economics
""The ultimate decision about what is accepted as right and wrong
will be made not by individual human wisdom
but by the disappearance of the groups
that have adhered to the 'wrong' beliefs."
Friedrich August von Hayek "
Ridley Scott confirms that Deckard is a Replicant

XRAYD's picture

Here is what Krugman actually said:


Paul Krugman:  Think about World War II, right? That was actually negative social product spending, and yet it brought us out.

I mean, probably because you want to put these things together, if we say, "Look, we could use some inflation."  Ken and I are both saying that, which is, of course, anathema to a lot of people in Washington but is, in fact, what basic logic says.

It's very hard to get inflation in a depressed economy.  But if you had a program of government spending plus an expansionary policy by the Fed, you could get that.  So, if you think about using all of these things together, you could accomplish a great deal.

If we discovered that space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months. And then if we discovered, oops, we made a mistake, there aren't any aliens, we'd be better –

Ken Rogoff:  And we need Orson Welles, is what you're saying.

Paul Krugman:  No, there was a Twilight Zone episode like this in which scientists fake an alien threat in order to achieve world peace.  Well, this time...we need it in order to get some fiscal stimulus.    



taxpayer102's picture

GW's last two articles about Fukushima prove we already have space aliens on earth - corporate CEOs, government types and politicians that sold out humanity to bring nuclear power plants to earth. Krugman would be vindicated if he advocated WWIII against nuclear power and its life-threatening radiation waste. 

connda's picture

Space aliens = Iran

JohnFrodo's picture

It is very interesting how all the armchair economists understand the biggest economic problem since 1929 better than people who have spent their whole life in the field and in the case of Bernake studied nothing but. The theory was right but GWB and then Obama fired at the wrong target. Maybe the Banks should have been allowed to fail and the mortageholder had theri debt reduced. The trillon dollar stimulus should have been larger and gone into real infrastructure, not salaries for civil servants.

nah's picture


Fix It Again Timmy's picture

I'm all for bombing Washington, D.C. back to the Stone Age - that's a war I would relish...

JohnFrodo's picture

Why not a war on oil, with the goverment on the side of Hydrogen. Yes I know I know it takes energy to produce Hydrogen, it takes energy to produce oil, yes I know I know it take double the energy to make hydrogen. That does not mean a hydrogen economy is impossible or unwanted.

Atlantis Consigliore's picture

hes a moron, 


it wasnt the twilight zone,  it was the Outer Limits,  3rd episode with 

Robert I Spy Culp


BeachBummed's picture

We just need more people on food stamps - every dollar generates $1.84 of economic activity, per Tom Vilsac (secretary of agriculture) this morning on MSNBC (at about the 2nd minute of video).  Come on people do your part and sign up!!


piceridu's picture

Wow, SNAP defies the laws of thermodynamics. Yes SNAP for one and all will save us!

Silver Dreamer's picture

War is however an excellent tool for population and economic resource control.

Prostar's picture

Classic "deer in headlights" look on Krugmans face.  I saw this interview.  I just missed the part about an alien invasion.


Prostar's picture

Classic "deer in headlights" look on Krugmans face.  I saw this interview.  I just missed the part about an alien invasion.


destiny's picture

That man is totally insane, just like ALL those technorats who are so called 'leading' our countries !  Many reports on alien issues are available on the WWW for those interested in that question, needless to say, should they be among us, around us....we'd be dead meat since a long time had they been 'hostile' let s cut it out with the so called 'threats' and terrorists, the only terrorists I see and know are the tenants of our respective 'white houses' obeying to elites who'd need hundreds of years to spend the money they have unfairly collected from TRUE labor and production.

Mercury's picture

Postscript: There have been Internet rumors floating around for years that the government was planning to use a "faked alien invasion" to justify a power grab by the government. I have no idea whether or not that rumor has any truth, and it is irrelevant for the purposes of this post.

Oh no, I think you need to get on this right away GW.

lesterbegood's picture

Check out this vid of ufo being escorted by fighter jets in Ohio. I believe it was shot yesterday.

JohnFrodo's picture

That was awesome, any way to verify it?

gangland's picture


cmon was that real or wtf? had to be cgi, right?

spanish inquisition's picture

Here is a look at an alien invasion with forewarning and no current alien occupation.

They are either peaceful or hostile, either way they will have military superiority. Who will be in charge of negotiations? Who will the aliens put in charge of negotiations?

Think about it, the only logical conclusion (from an insane political/national (Edit:religious nutjobs) position) is to first confirm an alien invasion. Then, launch everything you have to insure that you are the only group/people left to negotiate with/run what remains of the earth.....

EDIT: If they are hostile who cares you are dead anyway. If they are peaceful, your lineage wins (assuming you launch to remove some of your own countries undesireable elements)

Gully Foyle's picture

spanish inquisition

"They are either peaceful or hostile"

They could be ambivalent. We could be like insects with them as tourists, only noticing one when one becomes annoying.

Everyone assumes that Aliens would have HUMAN justification for coming to Earth. They are fucking Aliens with alien ways of thinking and motivations.







spanish inquisition's picture

They could be ambivalent

Correct. Still does not change the scenario. Fact is, if they are coming, you have psychotic politicians/military types making decisions from the perspective of human beings.


lesterbegood's picture

"Keynesianism"- just another "ism" concocted by the elite to divide and distract the masses. This isn't about which 'theory' is correct, it is about crimes committed by the 'elite' and their use of war to cover their tracks. Of course, Krugman and others like him want war! They have committed heinous crimes against We the People and need the chaos of war for cover and domination. The same MO was used for the WW2; confiscate the people's gold via executive decree, and start a war to cover up the theft and subvert the government.

Azannoth's picture

I bet the jews will start WW3 as soon as the last 'holocaust survivor' dies, they need to keep their Ponzi going

mess nonster's picture

Safe bet there. After all, they started the last two.

Chump's picture

Hey, you just made Krugman look sane and rational.

john39's picture

seems fairly obvious that Israel is behind the push to attack Iran (for no legitimate reason). 

JW n FL's picture

Isreal has NEVER ALLOWED the IEA to inspect Domina..

Iran lets the IEA inspect!

Lets Bomb Israel!



Jordan Asks IEA to Check Radiation From Israel’s Reactor
Abdul Jalil Mustafa & Agencies


AMMAN, 3 September 2004 — The Jordanian government has asked the International Energy Agency to conduct “its own measurement” of radiation affecting Jordan from Israel’s Dimona nuclear reactor in Negev, government spokeswoman Asma Khader announced yesterday at a weekly media briefing.

“It is not the first time we do that. We asked the IEA in 1992 to make its own measurement of radiation to compare it with our national evaluation of the Dimona radiation,” Khader said.

JW n FL's picture

I understand that Bombing Israe is crazy.. but so is Bombing Iran.. and even more so!

Logic does NOT! out wiegh Lobby Dollars! in Washington DC!

Lobby Whores! Corporate Owned Media! verse Common sense or Logic!

1 is in Heavy rotation and being force fed to the Sheepish Consumers and 1 is NOT!

PulauHantu29's picture

Maybe Krugman is bucking for a second Nobel.....the Nobel Peace Prize?

mirac's picture

See if Krugman can do anything when the EMP weapons begin exploding over New York and Washington and electronic communications go down.  This ain't going to be a WWII kinda war.  The romantic roar of propellars will be replaced by a quick high winding sound of incoming missiles from hundred of miles away.  And unlike other World Wars this one will hit the US shores.

Anonymouse's picture

Someone should suggest to Krugman that we just break windows for economic stimulus.  Same effect, with less loss of life

proLiberty's picture

This is the Keynesian theory maxed out.  When you believe that the economy is (C) consumer + (I) Investment + (G) government, then the more that G spends the bigger the economy can be.  Further, government waste only makes things better.  So, when government spends, there is no such thing as waste!

The economic benefit of building a ship that you later sink is just as positive as building a bridge or highway interchange that increases business opportunities. 

Libertarian theorist Randolph Bourne coined the phrase "war is the health of the state".  Krugman moral confusion is made far worse because in fact many wars are rooted in attempts to gain economic advantage. Keynesians are now shown to presume not only the power to seize all your income and assets, but to draft you into service of the State, all so they can attempt to force society to be better, as they would define it.  Such people should be shot, for they are just slavemasters in suits and who seek to use the tax, regulatory and monetary system as our chains and shackles.