4. Military Spending to pump up employment.

Even in the low-mechanized era of the New Deal, things like Hoover Dam, the TVA, etc. did not soak up much labor or stimulate capital investment in employment. By contrast, the Higgins Boat Factory in New Orleans ALONE had nearly the entire City employed by three factories running 24/7 (triple shifts). Along with on-site day care, schools, etc.

Reagan’s military spending meant that shipyards, airplane factories, and tank factories ran at full bore, employing direct and indirectly millions. In fact, in 1984 we hit the post-War record for new jobs created: 4.5 million! This is because military spending on ships, planes, tanks, etc is very labor intensive. With high paying jobs.

We needed that equipment to fight WWII. As for Reagan’s military buildup, I don’t think we needed as much. While we are still using it up in Iraq and Afghanistan, there hasn’t been much benefit gained other than the downfall of the Taliban and getting Hussein. Also the 20-30 year treasuries from that era still haven’t been paid off yet.

If needless spending is our problem we need to rate our national priorities. Like Defense. How much does it actually cost to defend America from foreign invaders? From air strikes? The number will be far lower than the $901b in the 2010 budget. What to do with all of Whiskey’s surplus munitions? I guess there will always be the temptation to use it.

Gov debt is a drop in the bucket compared to household debt. I think the root of our economic crisis is that we overleveraged ourselves with nothing to show for it. We bought tulips instead of building the internet, nanotech manufacturing, whatever. Fixing that, in part, means controlling the banks.