{"id":119463,"date":"2023-12-12T15:55:00","date_gmt":"2023-12-12T19:55:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=119463"},"modified":"2023-12-15T15:55:48","modified_gmt":"2023-12-15T19:55:48","slug":"us-defense-spending","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/us-defense-spending\/","title":{"rendered":"Does US Defense Spending Help the Economy?"},"content":{"rendered":"\n<p>Do increased investments in missiles, fighter jets, and other military resources really create American jobs? Do they pose economic risks that could undermine US interests over time?<\/p>\n\n\n\n<p>US defense spending is said to bolster economic development and foster <a href=\"https:\/\/www.shortform.com\/blog\/creating-new-jobs\/\">job creation<\/a>, but some analysts caution that increased defense spending may not be a boon for economic growth. Hiring challenges, supply chain snarls, and other issues are delaying defense contractors&#8217; peak production.<\/p>\n\n\n\n<p>Here&#8217;s a look at whether defense spending helps the economy or not.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-united-states-defense-spending\">United States Defense Spending<\/h2>\n\n\n\n<p>With geopolitical crises erupting worldwide, the government faces intense pressure to ramp up US defense spending. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-background\"><strong>Background<\/strong><\/h3>\n\n\n\n<p>The US Government allocated <a href=\"https:\/\/www.defense.gov\/News\/News-Stories\/Article\/Article\/3252968\/biden-signs-national-defense-authorization-act-into-law\/\" target=\"_blank\" rel=\"noreferrer noopener\">$816.7 billion<\/a> for defense spending in 2023 to cover a range of expenses including weapons, equipment, and personnel. These expenditures ballooned in response to <a href=\"https:\/\/www.defense.gov\/News\/News-Stories\/Article\/Article\/3570670\/us-military-continues-focus-on-supporting-israel-ukraine\/\" target=\"_blank\" rel=\"noreferrer noopener\">recent geopolitical crises<\/a>, including Russia&#8217;s 2022 invasion of Ukraine and Hamas&#8217;s October attack on Israel.<\/p>\n\n\n\n<p>The US has given Israel <a href=\"https:\/\/www.aljazeera.com\/news\/2023\/11\/3\/us-house-passes-14-5bn-military-aid-package-for-israel\" target=\"_blank\" rel=\"noreferrer noopener\">$3.8 billion a year in military aid<\/a> since 2016, and Ukraine <a href=\"https:\/\/www.wilsoncenter.org\/blog-post\/us-aid-ukraine-helps-american-economy-and-boosts-us-jobs\" target=\"_blank\" rel=\"noreferrer noopener\">over $44 billion<\/a> since Russia\u2019s invasion\u2014the latter representing less than 0.5% of America\u2019s 2023 defense budget. Experts say that most of this funding stays in the US, going toward jobs with domestic manufacturers.<\/p>\n\n\n\n<p>Despite this, Congressional Republicans recently <a href=\"https:\/\/www.reuters.com\/world\/us\/us-senate-sets-test-vote-ukraine-aid-despite-republican-opposition-2023-12-06\/\" target=\"_blank\" rel=\"noreferrer noopener\">blocked President Biden\u2019s request for an extra $64 billion<\/a> in <a href=\"https:\/\/www.shortform.com\/blog\/military-intervention\/\">military aid<\/a> for these countries, demanding stricter border controls and increased scrutiny over funds assigned to Ukraine.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-the-economic-and-security-boon-of-defense-spending\"><strong>The Economic and Security Boon of Defense Spending<\/strong><\/h3>\n\n\n\n<p>Some experts and President Biden argue that US defense spending isn\u2019t just beneficial but crucial for the prosperity and security of the US. They maintain that it:<\/p>\n\n\n\n<p><strong>1. <\/strong><a href=\"https:\/\/www.wilsoncenter.org\/blog-post\/us-aid-ukraine-helps-american-economy-and-boosts-us-jobs\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Bolsters domestic industries and job creation<\/strong><\/a>. <\/p>\n\n\n\n<p><strong>2. <\/strong><a href=\"https:\/\/www.nbcnews.com\/politics\/economics\/billions-ukraine-defense-spending-slow-translate-us-jobs-rcna122225\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Enhances national security<\/strong><\/a><strong>. <\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-the-hidden-costs-of-defense-spending-for-the-us-economy\"><strong>The Hidden Costs of Defense Spending for the US Economy<\/strong><\/h3>\n\n\n\n<p>However, analysts and other experts counter that the reality of defense spending is more complex, and doesn\u2019t always yield the immediate positive results that people expect.<\/p>\n\n\n\n<p><strong>1. <\/strong><a href=\"https:\/\/www.nbcnews.com\/politics\/economics\/billions-ukraine-defense-spending-slow-translate-us-jobs-rcna122225\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Current job creation is small relative to the size of the defense industry<\/strong><\/a><strong>. <\/strong>This is because, more than a year after Russia invaded Ukraine, <strong>defense companies are still grappling with securing and retaining skilled talent in a tight labor market.<\/strong> Hiring candidates who can get required security clearance and are also willing to relocate to remote weapons production sites has proven challenging. <\/p>\n\n\n\n<p><strong>2. The economy <\/strong><a href=\"https:\/\/www.nbcnews.com\/politics\/economics\/billions-ukraine-defense-spending-slow-translate-us-jobs-rcna122225\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>won\u2019t feel the benefits of defense spending for years<\/strong><\/a><strong>. <\/strong>Defense contractors face a number of additional hurdles that are stalling peak manufacturing, including <a href=\"https:\/\/www.shortform.com\/blog\/global-supply-chain-issues\/\">supply chain disruptions<\/a>, as well as the need to reactivate dormant production lines and build new factories. As a result, it may take years to ramp up production enough to meet demand.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-looking-ahead\"><strong>Looking Ahead<\/strong><\/h3>\n\n\n\n<p>Some argue that prioritizing defense spending now to support Ukraine&#8217;s resistance against Russia will <a href=\"https:\/\/www.wilsoncenter.org\/blog-post\/us-aid-ukraine-helps-american-economy-and-boosts-us-jobs\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>avoid potentially higher costs later<\/strong><\/a> by preventing a future where direct American military involvement becomes necessary.\u00a0\u00a0<\/p>\n\n\n\n<p>However, others contend that<strong> increased defense spending may eventually <\/strong><a href=\"https:\/\/www.investopedia.com\/articles\/investing\/072115\/how-military-spending-affects-economy.asp#:~:text=As%20the%20debt%20grows%2C%20the,growth%20and%20drive%20taxes%20higher.\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>strain the US economy<\/strong><\/a>, as continued borrowing to fund it could trigger negative economic effects such as higher interest rates, reduced spending in other sectors, and slowed economic growth. Ultimately, this could lead to higher taxes and program cuts, leaving less money in the pockets of American businesses and individuals.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Do increased investments in missiles, fighter jets, and other military resources really create American jobs? Do they pose economic risks that could undermine US interests over time? US defense spending is said to bolster economic development and foster job creation, but some analysts caution that increased defense spending may not be a boon for economic growth. Hiring challenges, supply chain snarls, and other issues are delaying defense contractors&#8217; peak production. Here&#8217;s a look at whether defense spending helps the economy or not.<\/p>\n","protected":false},"author":8,"featured_media":119464,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[81,275],"tags":[727],"class_list":["post-119463","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economics","category-politics","tag-articles","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Does US Defense Spending Help the Economy? - Shortform Books<\/title>\n<meta name=\"description\" content=\"US defense spending is supposed to bolster economic development and foster job creation. 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