Here’s a letter I sent to the New York Times.
To the Editor:
Mr. Krugman is correct in pointing out (Bombs, Bridges and Jobs; Oct. 31, 2011) the obvious hypocrisy of Republicans who decry cuts in “job-creating” defense spending while yet maintain that stimulus spending is waste.
However, it is unfortunate that Mr. Krugman falls into the same Keynesian trap as his rightward colleagues. He asserts, “Military spending does create jobs.” How true. But what use is a job if it doesn’t create a good or service that a consumer wants to buy?
Government-induced war production is not stimulative. Rather, it crowds-out private production. History bears that out.
Private investment, the keystone of economic growth, didn’t recover until after World War II had ended. Keynesians warned that cutting post-war military spending by 65 percent would result in a double-dip depression. Instead what followed was a period of historic prosperity.
Adjunct Analyst, Competitive Enterprise Institute
Washington, Oct. 31, 2011