Wars are Not Good for the Economy Essay -- Economics War

One of the more than(prenominal) enduring myths in Western companyliness is that warfares are somehow good for the rescue. Many people see a great deal of evidence to support this myth, after all man War II came directly after the Great Depression. This faulty judgment stems from a misunderstanding of the scotch way of thinking.The standard a war gives the economy a boost argument goes as follows Lets suppose that the economy is in the low end of the business cycle, so were in a recession or just a period of low sparing growth. The unemployment rate is high, people may be making less purchases than they were a year or two ago, and overall output is flat. But wherefore the country decides to prepare for war The governing reads to equip its soldiers with the bare gear and munitions wishinged in order to win the war.Corporations win contracts to fork up boots, and bombs and vehicles to the army. Many of these companies will have to hire extra workers in order to meet this increased production. If the preparations for war are large enough, large numbers of workers will be hired reducing the unemployment rate. Other workers may need to be hired to cover reservists in private sector jobs who nail sent overseas. With the unemployment rate down we have more people outgo again and people who had jobs before will be less brainsick nearly losing their job in the future so theyll spend more than they did. This extra spending will help the retail sector, who will need to hire extra employees causing unemployment to drop even further. A spin around of positive economic activity is created by the government preparing for war, if you believe the story. The blemish logic of the story is an example of something economists call The unordered Window Fallacy.The Broken ... ... a factor of production which will certainly help economic growth.2. Stability and Economic Growth in the Middle East If pause can somehow be established in the Middle East, th e U.S. government might not have to spend as much coin on the military as they do now. If the economies of the countries in the middle atomic number 99 become more stable and experience growth, this will give them more opportunities to trade with the United States, improving both the economies of those countries and the U.S.Personally I do not see those factors outweighing the oblivious term costs of the war in Iraq, but you can make a case for them. In the short term, however, the economy will decline due to the war as shown by the Broken Window Fallacy. Next time you hear someone hold forth the economic benefits of the war, please tell them a little story about a window breaker and a shopkeeper.