I saw this earlier today: Massive Defense Spending Leads to Job Loss - CEPR. It didn’t really trip my “Must Read” meter until I saw Edward Harrison’s post on the same subject. Indeed, Ed cites the article almost in its entirety.

I believe that the assertion that excessive defense spending costs jobs would probably be true even if we weren’t waging an expensive war.

I visited various Navy bases during the rollout of NMCI. I talked to people who were absolutely astounded by the fantastic pay they were getting to do the exact same job that paid significantly less anywhere else. Most had not previously worked in the defense industry.

I made a reasonable amount trading EDS at the time. Their stock had taken a beating because they were over budget on the project and there was a rumor that they would take a loss. However, I once heard a Boeing project manager say, “You can make decent money with successful defense projects, but you can make a fortune from failed ones.” So I bet on the government’s willingness to overpay EDS for their services. Sure enough, additional money came through, and the stock had a healthy bounce.

The military industrial complex is an amazing beast. Efficiency can only be referred to in a humorous context when discussing defense spending. That inefficiency comes at a cost; whatever the taxpayers would have spent the money on. Since so much of it is truly waste, it doesn’t actually matter what the money would be spent on. The government could acquire everything it already does and taxpayers could hold on to more of their money. I actually spent a portion of my career demonstrating this. Of course, I was smart enough not to phrase things that way. Instead, I offered that they could simply do more with the leftover dollars. There’s a fine line between telling the person that hired you that they’re incompetent and showing them how they could do more with the resources they have.