If Obama had really wanted to rescue the economy in 2009, he would have ramped up dramatically the wars in Iraq and Afghanistan instead of putting them on the path to euthanasia. In this sense he was a very bad Keynesian who made FDR spin in his grave.
Of course, that assumes he is smart enough to understand Keynesianism, being raised as a doctrinaire Marxist who was content to bask lazily in the glow of his presidential victory while a bunch of Clinton re-treads did their mediocre best for him . . . recreating HillaryCare. A more sinister interpretation believes that the inattention to the economy was all on purpose, since suppressing the middle class is the main objective of revolutionary leftism faced with successful capitalism almost everywhere. Still others simply chalk it up to Obama's incompetence, just another example of the Affirmative Action Presidency at work.
But I digress.
But I digress.
The simple reason for the need to have ramped up the wars back in 2009 is that the radical stimulus spending called for by the likes of Paul Krugman (3x what Obama ended up spending), who ridiculed the smallness of Obama's stimulus spending plan in The New York Times here, cannot be accomplished quickly through any other department of the federal government except through what we used to call more accurately The War Department. 'There are only a limited number of “shovel-ready” public investment projects — that is, projects that can be started quickly enough to help the economy in the near term,' Krugman wrote at the time.
That's for sure.
Proof of this can now be seen in the GDP numbers in just the last year when ISIS all of a sudden became a threat on the administration's radar screen even though ISIS had been building in the open for years and the administration actually had been warned about it and knew about it.
Federal government consumption had been a net negative subtraction from GDP for each of the last three years, 2011-2013, totaling -0.28 points of GDP for each year on average, and 75% of that came on average from cutting spending on National Defense.
All of that changed on a dime in 3Q2014 when ISIS surged into Iraq. Consumption on national defense suddenly vaulted to +0.69 points of GDP from +0.12 points in 1Q and -0.07 points in 2Q, to the point where defense spending now represents fully 97% of the federal contribution to GDP in the third quarter of 2014, and over 13% of GDP overall. All the current big contributors to GDP come in lower than this except for exports, with which defense spending is tied.
Only the military can spend large sums of government money quickly in this slow-moving, inertia-plagued bureaucratic state. Future presidents, take note: War is still the father of everything.
