Chapter 2 Discussion Board
Instructions:
Read Chapter 2. Discuss with your classmates the marginal benefits and the marginal costs of U.S. War on Terror. I understand that many have strong feelings about the war. Please limit your discussion to an economic analysis. This discussion is based on popular Economic Theory of Guns Vs. Butter.
Please go to the You Tube Site and copy and paste these links to You Tube and Watch.
http://www.youtube.com/watch?v=uWwrb--yk-w&NR=1
http://www.youtube.com/watch?v=U5NE9EyTCOU
Please watch these two videos and make this forum lively.
Post your original thought and then reply to 3 student Post.
Remember there should be a total of 4 posts made by you the student.
Student 1 Post:
The marginal costs and benefits of the U.S. War on Terror is many. With the finite workforce, you can only produce so many guns or so much agricultural resources or butter. If you produce more wartime supplies than you won’t have nearly as much supplies needed for resources at home. The U.S. had a stable economy and could produce both, however, in Iraq they had bombed factories and removed women out of the workforce and caused their entire possible guns or butter to lower. So if you have a good economy you can produce more of both and your production possibilities frontier will be thriving. If you have a bad economy it will lower and cause both guns and butter to have a lower amount, although you could focus on one to still outperform the good economy in that specific market.
Student 2 Post:
The marginal benefits to the U.S. of the U.S. War on Terror include many relatively minor but concrete benefits such as an increase in the production of military goods such as military drones, airplanes, equipment, and of course guns. The amount of labor directed towards military efforts either indirectly through the production of military goods or directly through the increases in military personnel also increases. While the most tangible marginal benefits of the War on Terror are directly tied to the military, intangibles exist as well, most notably in the form of the safety provided to the population of the U.S.. However, this cannot be measured easily and is a benefit in the sense of being an anti-loss, rather than being an actual gain, making it difficult to properly factor into a purely economic analysis.
The marginal costs to the U.S. of the U.S. War on Terror are easier to discern by the general population as they are more obviously directly affected by the costs compared to the benefits. The overall marginal impact is diminished domestic industry directly through decreased subsides or hiring, as well as through the loss of life and thus labor during the War, and indirectly through avenues such as negative effects on international trade. In terms of the government, assuming spending is kept constant then the domestic budget must be depressed to fund the increased military activity surrounding the War on Terror, otherwise, as has generally been the case, the deficit is allowed to increase which has its own negative effect on the economy. Even if spending is allowed to increase, domestic cuts may still be pursued to efficiently distribute the budget, such as the recent proposed cuts to agricultural subsidies, something which would directly impact the American consumer and potentially, fittingly, the price of butter.
Overall, while the benefits related to preventing loss of human life certainly hold value, the fact that this value is difficult to measure or perceive, especially by the general population of the U.S. which remains largely removed from the actual battlegrounds of the War, means that the marginal costs likely outweigh the marginal benefits for the U.S.. This is particularly true when considering the fact that there is so much money and labor that is already spent on military endeavors such as the War on Terror that any increase is likely to have a nominal impact on the ability to fight the war while having a larger impact on domestic spending or industry. While not at such a high emphasis as was the case during World War II, the position along the U.S. production possibilities frontier for guns and butter definitely seems tilted in favor of guns, creating higher and higher opportunity costs as we move forward for increases in the War effort as long as the military production technology remains stagnant and costly.
Student 3 Post:
It is very interesting to think about war from an economical standpoint and look at the benefits of it. Especially when you have been to Iraq and witnessed it firsthand, and how it may have benefited the US more so than it did Iraq. Another key point to factor was that the US was fighting a Terror group, sort of like a rebel force, and not another country/government. So while looking at it from that perspective, and while the war was fought in Iraq and not in the U.S. also helped the U.S. benefit from not having its factories and fields destroyed.
The marginal benefits on increases military and more troops being brought in creates more jobs. Also the need to create more vehicles, weapons and equipment helps create more jobs. Another benefit is the expansion of military technology that comes with war. As the enemy found new ways to attack us we found new technology to counter those attacks using newly developed technology. That new technology can also be sold to other countries involved in the war, or other wars, to help make/fund more money for other wars.
The marginal costs would come into effect more so post war than during the war. When the military starts downsizing it forces many vets get out that don't necessarily have a trade to help find jobs once out. Also, the temporary jobs that companies hired while the National Guard was deployed are handed back to those individuals, forcing the people who filled in back out without a job. Other domestic needs, like infrastructure do suffer as well as money may be redirected towards national defense spending to fund the war.
Student 4 Post:
So there are a few marginal benefits for our war on terror but I would say there are more marginal costs involved in this war on terror. Some benefits include more military jobs created and a safer domestic front. As far as the costs are concerned we are talking about peoples lives and the amount of money spent on this war is ridiculous and also takes away from our jobs and domestic products in the U.S. Having said that, the guns and butter theory provide a more simple explanation. The amount of "guns" or materials for war directly coorelate to the amount of domestic goods, "butter", that can be made. For example, if there is a large amount of military goods created for war then there will be much less domestic products created and the more domestic goods created the less oppurtunity for military goods. Overall, the war on terror is something that we will have to deal with as a country for quite some time. I believe the only reason we go to war is because the marginal benefits should always outweigh the costs.
Student 5 Post:
The US has an ongoing war on terror so it has benefited us for many years because of the countless jobs it has created. We have many divisions of the military which produce jobs for people. People in factories produce many of the items our militaries use but I also believe that our militaries have a positive economic benefit to other countries. We buy foreign made equipment from other countries which can help their economies and also sell equipment to other nations. This could also be seen as a negative for some because of the belief that we should produce things in the United States to keep the money flowing thru our own economy. Focusing on producing 'guns' would make us produce less 'butter' though which is what economist search for the perfect balance of.
