War Time and the Economy
How does war time affect the US economy? Due to multiple factors it affects the economy in both the US and foreign countries in a large way. The role of government spending in the economy is very important and the military spending that accompanies war time has a large impact on the economy during war time. In addition, the unique mental state of our population during war time creates a different spending pattern. From World War II to our current presence in Iraq today, war time has made a distinct impression on our economy. Wartime has been both positive and negative for our economy. World War II, in a sense, dug us out of the Great Depression, while the Vietnam War increased our deficit.
The first aspect of War time and economy to review is our approach to the guns and butter model. The guns and butter model is defined as the economical approach that the government takes when deciding on the percentage of funds to spend on our military versus the percentage of funds to spend on civilian goods. The guns and butter model specifically challenges the opportunity cost of military spending in the US economy. The division of spending between military and civilian costs must balance to equal the best proposed outcome for our country in both our economic state as well as the conservation of our country. Most literature on the guns and butter opinion states that guns today will transform into more butter tomorrow, however that is dependent on making the best choices possibly with balancing of our spending budget, as well as picking our specifics battles and wars. Our current involvement in war time is a good example of the division of o ...