I was wondering this when I debated war with my brother who said, that at least war and tax money going to the us army is not wasted, since war is profitable.
But how is war profitable? The Iraq war cost 5 trillion dollars, which is more money than exists in the entire world. And the US military has an annual budget of 500 Billion, which is about switzerlands GPD.
So how can you possibly recuperate that much money? Because that is more money than oil could possibly be worth.
So how does the US military make its money back?
In: Economics
I am pretty sure when people say war is profitable they dont mean for the government for the most part, but for everyone else. They mean for the private sector as government will hand out contracts. Defense contracts, logistics contracts, all kinds of contracts etc. I mean whole companies are created and live on just government contracts. Because a lot of these companies live on government contracts, war is profitable as war will get the government to buy more.
Take missiles and ammo for example. Yes the government still buys them for training and such, but for war? The check is blank. They can expect their orders to be magnitudes bigger. It is from war that these companies make more money, they become more profitable. I know a buddy that works at a company that supplies small product for the US military. When the Iraq war activity died down, they essentially had low orders and had to let people go. Then when things heated up again, and the government ordered more they hired more people. That’s just a small example, imagine a bigger scale with multi billion dollar companies getting contracts in the hundreds of billions.
All the destruction, who do you think gets contracts to clean up and to deal with all those occupied places? More contracts more companies, more money, more profits.
Essentially, you’re creating a problem in which you pay for a solution except a very expensive solution. The government is supply and demand.
Then there is economic growth from war at home, which some others can chime in but over simplifying here, war stimulates the economy as government spends. You can see that from WWII and aftermath.
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