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Old 01-10-2009, 10:40 PM
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Default Good Idea

I like the defense spending idea. Even if the entire amout of the stimulus wasn't spent on military equipment, that tyoe of expenditure has exactly the effect that I think is needed to re-start the economy.

The only problem is one of scale. Last year the Defense Department spent only a little more than $100 billion buying military equipment. Even if that amount were doubled or tripled, it still amounts to only about 1/3 of the amount of the total stimulus that the economists think is needed. Beyond that is the probable inability of the defense industry to produce substantially more than it has in recent years. If defense spending were suddenly multiplied, it is doubtful that the industry would have the capacity to ramp up production to actually spend the money to create jobs. In fact it's doubtful that they would make the investment in additional productive capacity, knowing that the order thruput resulting from the new stimulus money is only temporary.

But I think that a slug of money for increased defense spending should definitely be a part of whatever package is finally approved.