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
Broken Window fallacy.
Bombing a factory to justify building another one is generally a net economic loss.
Now, that being said, war can serve resource redistribution.
What if you get reparations for the victor? Those help pay off the contractors and manufacturers that made the war material, pumping money back into the economy. However, that’s simply externalizing the costs elsewhere.
As a general rule, war is not profitable overall (factoring all affecting parties). An argument could be made weakly; a war may fundamentally change institutions and economies, allowing much greater growth afterwards (Post-Marshall plan Europe, post war Korea and Japan, however all those areas mentioned with the exception of Korea were already wealthy, educated, and powerful nations before the war. So it’s a weak argument.) in some situations by clearing out the “deadwood” (an authoritarian government that prevents economic growth, extractive institutions, think removing slavery in the South allowing for industrialization to finally occur).
Your brother is incorrect from the “tax money on war isn’t being wasted” economic perspective. Public education has one of the highest ROIs of any spending category, as well as public R&D, infrastructure, etc. If those are underfunded due to the military, then economic performance suffers.
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