War spending as economic stimulus: Verdict is mixed

Sandra Erwin. National Defense Magazine, 08 February 2010.


In his recent book, “Freefall: America, Free Markets, and the Sinking of the World Economy,” Stiglitz lays out the criteria for what he considers are spending programs that stimulate the economy. The nation’s soaring debt makes it imperative that government earn the most bang for the buck, Stiglitz said in a speech last month at the Council on Foreign Relations. The multiplier effect of defense outlays on the economy is weak compared to spending in other areas. “Some kinds of spending have bigger multipliers than others,” Stiglitz said. “The lowest multiplier is war spending.”

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