The Vantage Point: The Economic Consequences of War on the US Economy

Thursday, March 01, 2012

The Economic Consequences of War on the US Economy

Given that the US has been in a constant state of war since 9/11, and given that the US has maintained hundreds of thousands of troops on foreign soil since World War II, the historical economic benefits of military spending for the US economy are worth considering in detail. A recent report published by the Institute for Economics and Peace entitled Economic Consequences of War on the US Economy (2011) addresses this gap specifically:

The higher levels of government spending associated with war tends to generate some positive economic benefits in the short-term, specifically through increases in economic growth occurring during conflict spending booms. However, negative unintended consequences occur either concurrently with the war or develop as residual effects afterwards thereby harming the economy over the longer term.