If the DoD budget was substantially cut, how bad would the recession get?

[midnight armadillo]

This thought passed through my head while consider the insanity of the DoD budget. Seems like any significant cuts to the DoD would result in serious economic repercussions...making the military one giant government jobs and stimulus program.


oh, we're fucked.

[leftstreet]

1. You mean cutting out profit to private contractors?

:shrug:

[Statistical]

2. Durring a recession no govt spending should be cut.

But after the recession when economy is growing solidly we will have a huge bill to pay and cuts deep cuts will need to be made and the DOD shouldn't be immune.

[elias49]

14. Couldn't the spending be redirected? nt

[Statistical]

15. It could as long as the multiplier effect of the new spending is higher AND you have the votes.

The risk is that now you have taken two hard to accomplish tasks (cutting DOD and increasing domestic spending) and combined them making passage even harder. For example cutting DOD to reduce deficit might attract votes of deficit hawks like say Ron Paul but redirecting the spending is unlikely. With current Congress it is virtually assured that you won't get 60 votes on a cut DOD and raise domestic pkg.

So I would refine my answer to be in order of best to worsr on aggregate demand you have:
1) Keep existing spending the same, boost spending by supplemental spending bills.
2) Redirect govt spending (like dod to domestic) from low multiplier spending to high multiplier spending.
3) Keep spending the same, deficit spend as needed.
4) Cut spending to reduce the deficit.

#1 & #2 are net positives to aggregate demand. #3 keeps aggregate demand the same. #4 cuts aggregate demand. During a period of time when private sector aggregate demand is falling (like rihgt now) for the govt to be cyclical (follow prevailing business cycle) and do the same is a death knell to the economy. We need the govt to be counter-cyclical.

[Jackpine Radical]

3. Yes, a lot of people would be suddenly out of work.

I have no problem with extending generous unemployment and retraining benefits to them all to ease them into being able to make productive contributions to our society. Kind of like criminal rehabilitation, I guess. But the savings from ceasing the manufacture of all those planes, tanks, drones, bombs, howitzers, APCs, ships, etc., as well as the savings from not maintaining a huge military abroad, would be enough to totally transform our society and restore us to leadership in a 21st century world economy.

[midnight armadillo]

5. jobs like mine!

My company largely works in DoD related (non weapons) R&D. A serious cutback in DoD funding would probably put me out of a job. Generous unemployment sounds good to me :)

[Bandit]

19. Especially in Japan and China and India.

Many of our military contractors are no longer in America nor or they even American Companies

[HereSince1628]

4. DOD Too big to Fail anywhere except the battlefield. n/t

[hedgehog]

6. Depends - if the money going to the DoD is shifted to roads,

bridges, railroads, new transmission lines, wind turbines, wave turbines, schools, etc. etc you'd employ many of the same people, but they 'd be doing something that adds to the economy instead of draining it.

[Sherman A1]

9. Precisely

Unfortunately it will not happen as we both know.

[FormerDittoHead]

12. The transition would take years, but you're right.

The problem is that "cutting money from the military" and "transition period" are never included in the same conversation, and one is instantly thrown into having to argue something that would happen instantly, and not only shouldn't we do that, but we COULDN'T.

But we have to get something more in return for our money than employing people to make things we really can't use (like $200 million jets to fight against cave dwelling terrorists).

I'm all for maintaining a strong military, but that COULD mean cutting it by over 60% and still have a military lots stronger than any other country.

Yes, instead of hoping for some "offshoots" from the military, let's invest in those other things - I guarantee you we'll get more for our money than what the military is sucking out of us.

[hedgehog]

16. Considering that our dependence on foreign oil is one of our

most critical weak points, energy independence is vital to our defense!

[ProgressiveProfessor]

21. Actually it would not

Those are not RD engineering and software jobs, which many DoD related are

[BrklynLiberal]

7. Not if the money was diverted to infrastructure, education, energy creation and the other sources

of job creation

[Fire Walk With Me]

10. Exactly. And those in defense employment could get look for work in those areas as well.

There is plenty of opportunity in "green" energy development for all that money and expertise.

[laughingliberal]

11. +1000 nt

[DeSwiss]

8. Plus.....

...we could probably totally eliminate the deficit by taxing all the dope money that the CIA earns for their black projects.

- Then we'd be all set.....

[bemildred]

13. That depends on what they do with the money that would be freed up.

[L. Coyote]

17. If the money was given to people instead it would be good for the economy

and the wasy to do that is hire them to work on infrastructure, etc.

[Mike 03]

18. I think the recession would recede, because we don't need this expense and level of cost of

defense right now.

[customerserviceguy]

20. It depends on where we cut it

If we close foreign bases, the damage is done to those local economies. Somehow, I feel that Japan and Germany can withstand it. And since they've been well behaved for over sixty years, we can chance it.