From: Gerald_A_Levy@MSN.COM
Date: Fri Nov 05 2004 - 11:10:06 EST
----- Original Message ----- From: "Jurriaan Bendien" <andromeda246@hetnet.nl> Sent: Friday, November 05, 2004 9:05 AM Subject: Permanent arms economy Personally, what I always find so peculiar about these Marxian discussions about "permanent arms economy" is that a lot of it consists of abstract theorising undisciplined by any serious analysis of empirical data, even although there is quite some literature on the economic effects of defense spending. In addition, the significance of military industries differs greatly from country to country. The U.S. defense research and development budget alone is five times that of all West European countries combined, for example. I think you need the quantitative dimension to relativise the theoretical arguments. Last year, the 46 percent growth in US defense spending was estimated to add about 1.7% to US GDP. In the first quarter of 2004, defense production accounted for nearly 16 percent of the increase in the value of GDP, according to the Commerce Department and BEA. Defense spending rose by 15.1 percent to an annualized rate of $537.4 billion, up from $463.3 billion in the comparable period of 2002/2003. The increase helped the US apparel and textile industry to its first net increase in employment over the first four months of any year since 1990. However, many government departments, such as the Department of Energy, engage in defense or defense-related projects; thus, just by looking at what the US Department of Defense spends, total defense spending is underestimated. Looksmart has some older articles on the economic effects of defence spending in the US available on-line, see e.g. http://www.findarticles.com/p/articles/mi_m1153/is_n7_v121/ai_21119786 Defense-related employment would be around 2% of all US jobs (but of course more jobs are directly dependent on those jobs) and defense outputs would be to the order of 3-4% of GDP. Therefore military expenditure in the US can have a significant effect on the annual increase in national income. Jurriaan
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