<div dir="ltr">interesting, shows the inverse relationship between military spending and economic growth over a long period of time<div><br><div class="gmail_quote">---------- Forwarded message ----------<br>From: <b class="gmail_sendername">Bob Reuschlein</b> <span dir="ltr"><<a href="mailto:bobreuschlein@gmail.com">bobreuschlein@gmail.com</a>></span><br>Date: Sat, Apr 9, 2016 at 7:28 PM<br>Subject: History US Military Economy<br>To: <br><br><br><div dir="ltr"><p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'">Link
to send or tweet to others: </span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><b><span style="font-size:12pt;font-family:'Times New Roman'"><a href="https://bobreuschlein.wordpress.com/2016/04/09/history-us-military-economy/" target="_blank">https://bobreuschlein.wordpress.com/2016/04/09/history-us-military-economy/</a></span></b></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><b><span style="font-size:12pt;font-family:'Times New Roman'"> </span></b></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><b><span style="font-size:16pt;font-family:'Times New Roman'">100 Year History US Military Economy </span></b></p><p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:14pt;font-family:'Times New Roman'">by Professor Robert
Reuschlein</span><b><span style="font-size:16pt;font-family:'Times New Roman'"></span></b></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><b><span style="font-size:12pt;font-family:'Times New Roman'"> </span></b></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><b><span style="font-size:12pt;font-family:'Times New Roman'">ROOSEVELT</span></b><b><span style="font-size:12pt;font-family:'Times New Roman'">’s New Deal, 1933-1945</span></b></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'">New Deal deficits create strong economic growth:
correlation .73 from <a href="tel:1934" value="+661934" target="_blank">1934</a> through <a href="tel:1939" value="+661939" target="_blank">1939</a>. New Deal Provides Five Times War
Growth: Total growth from <a href="tel:1933" value="+661933" target="_blank">1933</a> to <a href="tel:1941" value="+661941" target="_blank">1941</a> was 86%. Total growth from <a href="tel:1942" value="+661942" target="_blank">1942</a> to <a href="tel:1947" value="+661947" target="_blank">1947</a>
was 17%. Unemployment change followed deficit change R=.74. Note that unemployment decreased at a steady
rate from 1934-1941 except for one year.
That one year, <a href="tel:1938" value="+661938" target="_blank">1938</a>, the increase set back the recovery by about three
years. Without that setback the economy
would have recovered in1940. That setback was actually a two year process, when
Roosevelt attempted to balance the budget.
This created the mistaken impression that World War II caused the ending of the
Great Depression. This delayed recovery
caused the end of the Great Depression to be postponed until <a href="tel:1943" value="+661943" target="_blank">1943</a> instead. The biggest economic drop years in the last
100 years cover the multiyear 1930-33 trade war of the Great Depression and the
2 post world war three year stagnation periods 1919-21 and 1945-47. Reality follows with a simple model based on
Military Lowering & Deficit Raising Economic Growth Rate: Best Fit occurs
from 1941-1948, with Correlation of
-0.97. Key statistic is the Net
Military Burden (Military minus Deficit) Increases from 1941 to 1946 steadily
lowering the growth rate from positive 15.9% to negative 11.9%. 1946-1948 both trends reverse as the lowest
military (3.7% of the economy) of the entire Cold War in 1948 creates enough
growth to re-elect President Truman. </span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><b><span style="font-size:12pt;font-family:'Times New Roman'">WILSON and the Twenties (1913-1926)</span></b></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'">Note the <a href="tel:1914" value="+661914" target="_blank">1914</a> US economic slump as the World War
begins. Not unlike the Swedish slump in
WWII. Both are cases of a neutral country losing trade with some of the warring
parties. Note how the war boom is more
than cancelled by the three year postwar slump.
Note how the postwar slump translates into Wilson's
League of Nations confirmation problem. Note
how the roaring twenties only roared for five years (1922-26), after the Spindeltop
Texas oil surge and automobile sales covered the easy top 20% of Americans,
then stalled. Although the stock market crashed October 28, <a href="tel:1929" value="+661929" target="_blank">1929</a>, the economic
growth drops of the Great Depression did not start until June <a href="tel:1930" value="+661930" target="_blank">1930</a> when the
Smoot Hawley tariff bill was signed into law.</span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><b><span style="font-size:12pt;font-family:'Times New Roman'">HOOVER</span></b><b><span style="font-size:12pt;font-family:'Times New Roman'"> Election and the Great Depression (1927-1933)</span></b></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'">Hoover</span><span style="font-size:12pt;font-family:'Times New Roman'"> was elected in the 1927-1928 two year no growth economy. The Smoot-Hawley special session of Congress
starting in September <a href="tel:1929" value="+661929" target="_blank">1929</a> lead to the stock market crash four days after the
bill was finalized by the committee. Economy continued strong until the June
11, 1930 signing of bill. 1000
economists signed a petition to Hoover to not
sign the bill predicting it would lead to a trade war with Europe. Trade was 7% of the economy in 1929. After the signing of the bill, trade dropped
to 2% of a then 30% lower economy in 1933.
Hoover
attempts to balance the budget doubled the rate of collapse in 1932. Economy bottomed in1933 due to lost trade
from bill at an unemployment rate of 25%.</span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><b><span style="font-size:12pt;font-family:'Times New Roman'">ROOSEVELT</span></b><b><span style="font-size:12pt;font-family:'Times New Roman'"> NEW DEAL</span></b></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'">Notice that the economy grows about 10%
per year 1934-1943 except for 1937-38.
The <a href="tel:1938" value="+661938" target="_blank">1938</a> recession was due to trying to balance the budget running for
reelection in 1936. The new social
security tax and jobs program cuts shrunk economic growth 5% and increased
unemployment from 14% in 1937 to 19% in 1938.
Without this blunder, full employment would have been by 1940 not
43. Unemployment was dropping about 3%
per year with New Deal jobs program spending.
We would have been spared the myth the war ended the depression. Note the high net military burden devastates
the growth rate in the 1944-47 period.</span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><b><span style="font-size:12pt;font-family:'Times New Roman'">TRUMAN</span></b></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'">With the tariff bill crashing the world
economy in depression, the GATT restarts world trade January 1, <a href="tel:1948" value="+661948" target="_blank">1948</a> and combined
with lowest military of the Cold War to produce the first growth after the war
in 1948, just in time to re-elect Truman after three years of negative growth.</span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><b><span style="font-size:12pt;font-family:'Times New Roman'">EISENHOWER</span></b></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'">Ike doubles Truman's 5% military to 10%
military budget percent of the economy after Korea
leading to the worst decade of the Cold War in lost share of world GNP by the US.</span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><b><span style="font-size:12pt;font-family:'Times New Roman'">KENNEDY</span></b></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'">Kennedy increases the deficit with an
investment tax credit which steals all the credit from the lower military also
creating the sixties boom. </span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><b><span style="font-size:12pt;font-family:'Times New Roman'">JOHNSON</span></b></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'">Johnson's war stalls the economy with flat
productivity in <a href="tel:1967" value="+661967" target="_blank">1967</a> and slowing growth in 1969-1970.</span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><b><span style="font-size:12pt;font-family:'Times New Roman'">NIXON</span></b></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'">The burst of growth in <a href="tel:1972" value="+661972" target="_blank">1972</a> comes as Nixon
signs a 20% social security increase into law. But Watergate, end of war, and
oil crisis trigger two year slump in 1974-75.
The recovery comes to late in 1976 to save Ford. This preserves the
record of low military states losing all Cold War elections as the man from
high military Georgia
wins.</span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><b><span style="font-size:12pt;font-family:'Times New Roman'">CARTER</span></b></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'">Carter's does the responsible raising
taxes in <a href="tel:1978" value="+661978" target="_blank">1978</a>. Economy slows in 1979-80
further due to oil crisis and military buildup.</span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><b><span style="font-size:12pt;font-family:'Times New Roman'">REAGAN</span></b></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'">The biggest peacetime increase in military
spending of the Cold War hires jobs away from productive industries, creating
the <a href="tel:1982" value="+661982" target="_blank">1982</a> recession and 10.8% unemployment. The three year phased in tax cuts
were twice as large as the military increase, giving a net stimulus to the
economy by re-election year 1984 as the high military half of the country grows
at triple the rate of the low military half of the country. This military states real estate bubble
bursts in the Savings and Loan crisis at the end of the decade.</span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><b><span style="font-size:12pt;font-family:'Times New Roman'">BUSH 41</span></b></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'">The <a href="tel:1990" value="+661990" target="_blank">1990</a> tax increase and the three year
post Cold War slump combine to defeat him in 1992. The Gulf war is not enough
to stop the tide of the massive end of Cold War military cuts. These released military resources later
create a great manufacturing boom in the nineties under the next president.</span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><b><span style="font-size:12pt;font-family:'Times New Roman'">CLINTON</span></b><b><span style="font-size:12pt;font-family:'Times New Roman'"></span></b></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'">The <a href="tel:1993" value="+661993" target="_blank">1993</a> military cut combines with Bush
41 Cold War peace dividend and the fastest changing part of the long cycle boom
period to give prosperity and a balanced budget. Despite 1993 trade treaties manufacturing
jobs and incomes rise as 23 million jobs are added to the economy. Trade losses are not enough to offset the
manufacturing injection from the end of the Cold War military economy. Military spending economy drops from 6.5% in
1986 to 2.9% by 1999, adding 3.6% of GDP to capital investment in the real
economy each year. The normal 54 year
cycle takes the form of the internet economy, which is so strong that while
balanced budgets slow the stock market, the economy continues for a while
longer before the mild military buildup at the end of the Clinton years creates
a stall that is amplified by the post 9-11 two year military buildup.</span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><b><span style="font-size:12pt;font-family:'Times New Roman'">BUSH 43</span></b></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'">2.8 million factory jobs are lost in the
two year military buildup after 9-11-01, 1 million from trade and 1.7 million
from the military buildup. Iraq
surge helps trigger the collapse of the house of cards mortgage fall in 2007
set up by runaway real estate in military buildup states in the early war years. This is very similar to what happened in the
eighties Reagan military buildup followed by the Savings and Loan bust. Once again the bi-coastal military and the
monetary drain the real economy of the industrial Midwest
where job losses were triple those of the military half of the nation. Military spending surged from $280 billion
before 9-11 to $405 billion including homeland security increase after 9-11.</span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><b><span style="font-size:12pt;font-family:'Times New Roman'">OBAMA</span></b></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'">The first Democrat since World War II to <b>NOT</b>
cut military in his first year in office, adding to the sluggish economic
recovery. Bad advice came from hawk
economist Larry Summers. Obama should
have listened to Biden or Clinton’s
Nobel Laureate Economist Joseph Stiglitz.</span><span style="font-size:12pt;font-family:'Times New Roman'"> Tripling troop levels in Afghanistan was not good for the
economic recovery, although Larry Summers’ military Keynesianism would predict
that military jobs would be good for the economy.</span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'"> </span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'">For more on the Depression War Roosevelt
Period:</span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'"><a href="https://www.academia.edu/4044531/ROOSEVELT_Depression_War_Myths" target="_blank">https://www.academia.edu/4044531/ROOSEVELT_Depression_War_Myths</a></span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'"> </span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'">For more on the 100 year military economy US history:</span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'"><a href="https://www.academia.edu/4044532/PRESIDENT_Military_Economy%201910-2009" target="_blank">https://www.academia.edu/4044532/PRESIDENT_Military_Economy
1910-2009</a></span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span lang="DE" style="font-size:12pt;font-family:'Times New Roman'"> </span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span lang="DE" style="font-size:12pt;font-family:'Times New Roman'">Professor Robert Reuschlein, Dr. Peace, </span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'">Nominated
for the Nobel Peace Prize 2016</span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'">Real
Economy Institute, Madison,
Wisconsin</span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'">CONTACT: <a href="mailto:bobreuschlein@gmail.com" target="_blank">bobreuschlein@gmail.com</a> 608-230-6640,
</span></p>
<p class="MsoNormal" style="margin-bottom:0.0001pt"><span style="font-size:12pt;font-family:'Times New Roman'">INFO: <a href="http://www.realeconomy.com/" target="_blank">www.realeconomy.com</a> </span><span style="font-size:12pt;font-family:'Times New Roman'"></span></p></div>
</div><br><br clear="all"><div><br></div>-- <br><div class="gmail_signature"><div dir="ltr"><div><div dir="ltr"><div>Check out the Commons Transition Plan here at: <a href="http://commonstransition.org" target="_blank">http://commonstransition.org</a> </div><div><br></div>P2P Foundation: <a href="http://p2pfoundation.net" target="_blank">http://p2pfoundation.net</a> - <a href="http://blog.p2pfoundation.net" target="_blank">http://blog.p2pfoundation.net</a> <br><br><a href="http://lists.ourproject.org/cgi-bin/mailman/listinfo/p2p-foundation" target="_blank"></a>Updates: <a href="http://twitter.com/mbauwens" target="_blank">http://twitter.com/mbauwens</a>; <a href="http://www.facebook.com/mbauwens" target="_blank">http://www.facebook.com/mbauwens</a><br><br>#82 on the (En)Rich list: <a href="http://enrichlist.org/the-complete-list/" target="_blank">http://enrichlist.org/the-complete-list/</a> <br></div></div></div></div>
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