General Discussion
In reply to the discussion: Ron Paul wants to build more bases in the U.S. [View all]Saving Hawaii
(441 posts)Doesn't matter if you hire them into civilian jobs or military jobs, the whole idea is to provide employment for the millions and millions of unemployed Americans. It's better that you hire them into civilian jobs. There's a difference in the velocity of money in their hands compared to soldiers that creates a bigger Keynesian multiplier. Hiring more soldiers probably isn't much more useful than just giving that money to rich people.
The point of the WPA was not to create dams, national parks, and roads. The point was to provide employment, incomes, and spending money, and in doing so to increase aggregate demand so that the non-government economy could recover. That it created nice dams, national parks, and roads was just icing on the cake. A side effect so to speak. Keynes himself suggested (jokingly) that they should bury money at the bottom of mine shafts and fill them in, so that entrepreneurs would hire people to dig the money up. It would work just as well for the economic effect (though you wouldn't have nice dams, national parks, and roads afterwards).