How is war good for the economy?

[Spliff aka mac jesus]

Everyone talks about how war boost's the economy but no one explains how.

HOW?

 

[I. Cold]

take a look at the stock market before the war, then look at it now. its not hard to see, Forbes.

 

[Hit The Blunt]

Government Spends Money
^^^That's the short version.

Here is the long version
Government..................Spends.....................Money

 

[shep]

production is increased during the war.

the problem is in the long run you have a surplus of military items and a shortage of items that the public would buy, that means the economy is bad. it needs the equilibrium.

 

[Spliff aka mac jesus]

Government Spends Money
^^^That's the short version.

Here is the long version
Government..................Spends.....................Money

They spend money they don't have.

This is not a good thing. It has horrible reprucussions in the future.

think of it this way:

You have a credit card. You go on a wild $50,000 shopping spree. In the short term, this seems like happy times. When the creditors come after you and you're only making minimum wage.... You're fucked.

 

[m.w.merlino]

basically wat was said, any money spent has to go somewhere, and the more money spent, the more money there is to be spent.

 

[T.C]

war has a pshycological(probably spelled that wrong) effect on the nation which makes us a little more active.......when we engage in more activities we spend money......think about how many events, memorials and festavals happened in major cities during war time......think about how many(and the type of) movies that came out during war time.

 

[phil]

considering ive made back the 700 dollars (and then some) i lost last year on my 401 k id have to say that it worked for me!!!!

 

[Hit The Blunt]

"think of it this way:

You have a credit card. You go on a wild $50,000 shopping spree. In the short term, this seems like happy times. When the creditors come after you and you're only making minimum wage.... You're fucked."

Why would I think of it like that. It is not similar at all to the situation we are looking at. Our debt is funded by our own population through taxes and bonds. We can fund old debt with new debt--this will NEVER be a problem as long as the debt-to-GDP ratio is in check. The U.S. Debt-to-GDP ratio is nothing to be worried about. War raises Debt but War also raises GDP keeping the ratio relativly in line. You will notice that the U.S. debt (besides for a few years here and there) has ALWAYS increased. What? do you think that means the U.S. is going to go bankrupt? No because our GDP has ALWAYS increased as well. think of it this way......I will give you 3 people and you tell me who is worse off.

House Valued at: 100,000
Cash: $5,000
Mortage of: $50,000

House Valued at $200,000
Cash: $10,000
Mortgage of: $100,000

house Valued at $300,000
Cash: $15,000
Mortgage of: $150,000

I would contend that they are all equally stable. While the third choice may be the richest they all can take equal % of depreciation to their homes before they may get in trouble. This is similar to the U.S. -- Is the guy with the Debt of $150,000 in more trouble then the guy with the debt of $50,000 just cause he has more debt?