WAPO Runs Another Piece About Defense Contractors Unhappy About Being Thrown Off Welfare

July 19, 2012

Apparently military contractors hold an especially warm place in the hearts of the Washington Post editors. How else can one explain another story devoted to the fact that they will lose money and reduce employment if the military cuts slated to go into effect in January actually occur.

Some folks may recall a major news article the paper ran last month that was devoted to a study commissioned by military contractors that hyped the job loss that would result from these cuts. Of course in a downturn like the present one, any cuts in government spending will cost jobs.

The logic is fairly simple, the government spending is hiring people, both directly and indirectly. It hires people directly because workers are being paid to teach, build roads, or build bombers. It hires people indirectly because these workers will then spend most of their pay at grocery stores, restaurants and other places where their spending will help to employ people.

If the economy were close to full employment then government spending could be seen as crowding out private spending, primarily by raising interest rate. However, we are not close to full employment, so cuts in government spending will cost jobs. It is that simple.

So just keep saying that until its clear: cuts in government spending (military or otherwise) cost jobs. Don’t waste anyone’s time talking about the budget and the economy until you understand this point. And when you do, please tell the WAPO to stop highlighting the whining of military contractors who seem to think the government owes them contracts.

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