Berto Jongman: Economic Consequences of War

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Berto Jongman

Economic Consequences of War

New report released by the Institute for Economics & Peace analyses the macroeconomic effects of US government spending on wars and the military since World War II.

The IEP’s latest report,  Economic Consequences of War on the US Economy,  analyses the macroeconomic effects of US government spending on wars and the military.

The report studies five periods – World War II, the Korean War, the Vietnam War, the Cold War, and the Afghanistan/Iraq wars – exposing the effect of war financing on debt, consumption, investment, jobs, taxes, government deficits, and inflation.

The findings of the report show devastating trends for US tax, debt and deficit debates.

Download the report here

Key findings

The U.S. has paid for its wars either through debt [World War II, Cold War, Afghanistan/Iraq], taxation [Korean War] or inflation [Vietnam]. In each case, taxpayers have been burdened, and private sector consumption and investment have been constrained as a result.

Report highlights

The report shows the following economic indicators experiencing negative effects either during or after the conflicts:

  • Public debt and levels of taxation increased during most conflicts
  • Consumption as a percent of GDP decreased during most conflicts
  • Investment as a percent of GDP decreased during most conflicts
  • Inflation increased during or as a direct consequence of these conflicts

The higher levels of government spending associated with war tends to generate some positive economic benefits in the short-term, specifically through increases in economic growth occurring during conflict spending booms. However, negative unintended consequences occur either concurrently with the war or develop as residual effects afterwards thereby harming the economy over the longer term.

Phi Beta Iota:  There appears to be a continued reluctance to address the real causes of our terrible situation: corruption across the board.  No amount of intellectual posturing, whether in a book or in a conference, is a substitute for full transparency and the truth — the whole truth.  The lack of integrity across all eight tribes — academia, civil society, commerce, government, law enforcement, media, military, and non-government/non-profit — is the ROOT CAUSE of our collapse.

See Also:

Journal: Politics & Intelligence–Partners Only When Integrity is Central to Both

2012 THE OPEN SOURCE EVERYTHING MANIFESTO: Transparency, Truth & Trust

2010 The Ultimate Hack Re-Inventing Intelligence to Re-Engineer Earth (Chapter for Counter-Terrorism Book Out of Denmark)