Comment 26637

By Maths (anonymous) | Posted September 18, 2008 at 09:06:19

A Smith asked, "how do you explain the fact that military spending did not also follow this path, shrinking as a share of a growing economy?" Recall that the US was involved in a gargantuan war effort to fight on two vast fronts. Military spending per year grew much faster than GDP which explains how it could rise as a percentage of GDP.

Just think, the US went from 175,000 in the army in 1939 to 6m in 1945, 125,000 in the navy in 1939 to 3.5m in 1945, 2,500 aeroplanes in 1939 to 80,000 in 1945, &c. That's just a tremendous mobilisation in a very short time, increasing the size of the miliary by orders of magnitude. It's also a very potent form of military Keynesian stimulation for the economy.

P.S. I wholly approve that you have to answer a maths question to post a comment here!

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