Ending Recession Like FDR Did?
March 2, 2009
By Bruce Walker
Barack Obama is trying to end a recession and spark a recovery by the highly dubious means of shoveling vast amounts of federal dollars into domestic spending. He is consciously trying to mimic FDR and the New Deal. There is only one problem with this: FDR's New Deal was an economic failure. Roosevelt tried a variety of different projects, programs, and spending to get us out of the Great Depression. Some of those, like the National Recovery Administration, were quite consciously modeled after the policies of Fascist Italy. Yet four years after Roosevelt took office, the economy was in worse shape than when he was elected.
The Depression ended, but how? As Hitler grew more menacing in Europe, as Mussolini conquered Ethiopia, as Japan invaded China, as Stalin began to view the Baltic States and Finland with quiet lust, civilized nations like France and Britain began to rearm. In September 1939, when war broke out in Europe, the western democracies began to place huge orders with the United States. The Second World War brought us out of the Depression. Military spending could bring us out of the recession now.
Federal dollars spent on national defense go towards the upkeep of our men and women in uniform, the acquisition of goods and services from our industrial base, and the research and development of new technologies. If Obama wants to spend huge oceans of tax dollars, this is the best investment he can make. Consider the positive impact of military spending over domestic spending.
Our men and women in the armed forces receive health care, as do their dependents. They are housed, clothed, and fed. Our troops are trained in how to operate high tech equipment and they receive on the job training in this work. Military forces are disciplined and fit. It is much better to pay someone to be a soldier, sailor, or airman than for the federal government to pay for meaningless make work jobs or to finance extended unemployment benefits.
Raising troop levels will also reduce the number of civilians competing for the same jobs in the domestic industry. Military service has proven the best vehicle for blacks and other minorities to climb out of poverty, to acquire education, and to gain the respect of American society. It is not coincidence that Colin Powell, long the most well regarded black man in America, a man who in 1996 could have waltzed into the job that Obama fought to get, rose through the ranks of the United States Army.
The vehicles, equipment, and other stuff that our military forces need to operate absorbed a huge chunk of domestic consumption in World War II. When Detroit and our automakers are looking at going belly up and laying off huge numbers of workers, why not increase military production so that automakers can begin to turn their production into making what our armed forces need? The federal government has legitimate national security reasons for making sure that certain domestic industries stay in production. Why not increase spending there, and so save our domestic industrial base while increasing our national security?
Military spending has been the principal vehicle for high technology growth (when we consider that NASA was, largely, a part of our military program.) Why do we have the Internet? Because of the Department of Defense! We have no idea just how much priceless spinoffs may come from higher defense spending in research and technology, but we know that military spending has historically been the greatest stimulus of innovation and invention.
A strong national defense also strengthens national currencies. This does not mean a big military is the perfect or best way to strengthen the dollar, but it is one proven way to do so. More importantly, a weak military (or a military perceived as weak) weakens a currency. If we begin to lose the war on terrorism, that will drive the dollar farther down than it is.
Pumping up the military would also insure that we could win any war on terrorism or against any potential enemy. We have forgotten just how much 9-11 cost our economy. A victory over our forces in the field or another terrorist attack like 9-11 will send our economy into a tailspin that no volume of printed currency can mask.
And if the federal government is bound and determined to spend trillions of dollars, should it at least not get something back for us? Safety is "something." In fact, in our federal system, safety is one of the few types of expenditures that the federal government actually should be making.
Do we need more military spending? Well, we are still in a war for our survival against enemies who wish to destroy us. We do have troops in the field every day fighting our enemies. There are nations, like China and Russia, which are flexing their muscles and watching for our weakness. If military spending prevents aggressive nations from engaging in war, then military spending is the most fiscally prudent expenditure possible (wars cost a lot more than defense buildup.)
Barack Obama wants to end our dangerous economic collapse. He is trying what FDR tried first, and which failed miserably. He should try what FDR did to bring us out of the Great Depression: arm America, ward off our enemies, and bring us peace and prosperity.