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Originally Posted by Villages Kahuna
I don't have a clue, although I'd guess that the vast majority of defense spending goes to companies here in the U.S. The effect of military spending seems to be the basis of the old saying I learned when I was in the Army regarding investing during a time of war. It went something like, "Buy on bullets, sell on bugles", meaning buy when the war starts and sell when the armistice is signed. The saying is a little counter-intuitive--most people get nervous about the markets when war is begun-- but the economy and defense contractors get a bump as long as we're at war.
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Ronald Reagan bought a strong military and caused the demise of the Soviet Union and brought down the Berlin wall. Bill Clinton "sold" when the bugles sounded and left us so short handed militarily than it took months to muster the men and material to go to Iraq. Whether or not one approved of the Iraq war the point was seen that having a weak military was not good for the countries defense. Luckily it was our choice of timing the start of the war allowing us to build a maximum manpower and technological assault. What fools we be to ever let our position of strength down, not knowing at what point some despot or nutcase will need to be challenged.