Center for progressive economics

Decoration Icon

The Blog

The U.S. Military as a Macroeconomic Factor

Besides being one of the main causes of excessive deficit spending by fighting the many hot and cold wars, our mighty military provides some amount of security for the dollar.  You might have noticed the massive purchases of Treasuries during a financial and/or physical crisis somewhere in the world.  Security is a major factor in this financial flight to the U.S.

So we are now world policemen and protectors (and nation builders).  The question is why should we be paying for all this by ourselves!  This causes deficit spending putting more pressure on the dollar.  It also allows other nations to significantly lower their defense budgets.  This gives them a competitive advantage by allowing more domestic spending for infrastructure, education, research etc.

The answer is, we should Charge!   A perfect example of this, is the 1990 Gulf War.  We received payments from the oil rich nations.  There are several ways to negotiate and implement this policy with other rich nations.  Most are export nations with the U.S. anyway, they would just get the funds back through our imports, like oil.

Leave a Reply