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    (Original post by Tory Dan)
    I have no fears of the US arsenal, it helps police and keep the world peaceful. Russia's arsenal is potentially a Pandora's Box and a very big threat to international security and world peace.
    Should read: Play god and build empires.
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    (Original post by Tory Dan)
    The Russians have dismantled most of their heavy stuff, this includes ICBM's, nuclear ASM's, cruise missiles. What is missing are the many nuclear artillery warheads, small tactical theatre size warheads and bombs which were given out willy nilly to army groups in the Warsaw Block countries. It is internationally known that Russia's armed forces are a mess, they have played on their strong non-conventional strength and with the amount of corruption I dare say it would be hard to find a disgruntled poorly paid officer and his men and secure a nuclear weapon. One of my friends dad worked for NATO and he saw the state of the facilties where they had stored or were still storing weapons, nuclear weapons in rotten crates in a flooded bunker going rusty, they don't even have the lightbulbs in the rooms anymore because there is such a money problem.

    I have no fears of the US arsenal, it helps police and keep the world peaceful. Russia's arsenal is potentially a Pandora's Box and a very big threat to international security and world peace.
    It isn't quite as bad as you think thou. Without continuous replenishing of the neutron triggers ( tritium or polonium-210 ) most weapons have their yield sufficiently degraded within a decade or so, and with some weapons can't even detonate without a fresh supply of certain isotopes. The main danger is probably highly enriched U-235 as building a weapon from it is relatively simple ( but still not very easy ). Fortunately U-235 is sufficiently expensive to produce that most of the arsenal is likely to consist of plutonium based weapons rather than uranium ones.
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    (Original post by UniOfLife)
    Well, the basic argument is that the $17 billion all goes to US companies and citizens and thus is just going straight back into the economy. It isn't wasteful in the sense that the money is leaking out of the US economy.

    The economic argument can only be that the US could better spend that money on other projects and redistribute it some other way. But since they don't need to do that (because they aren't short of money) this argument doesn't have much weight.
    No offence, but this is absolutely terrible reasoning. So bad it has even got it's own name as a specific economic fallacy: http://en.wikipedia.org/wiki/Broken_window_fallacy

    Have you ever witnessed the anger of the good shopkeeper, James Goodfellow, when his careless son happened to break a square of glass? If you have been present at such a scene, you will most assuredly bear witness to the fact, that every one of the spectators, were there even thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation—"It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers if panes of glass were never broken?"

    Now, this form of condolence contains an entire theory, which it will be well to show up in this simple case, seeing that it is precisely the same as that which, unhappily, regulates the greater part of our economical institutions.

    Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier's trade—that it encourages that trade to the amount of six francs—I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is that which is seen.

    But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, "Stop there! your theory is confined to that which is seen; it takes no account of that which is not seen."

    It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented.
    It's just as bad as the argument that WW2 saved the world economy from the Depression.
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    (Original post by DrunkHamster)
    No offence, but this is absolutely terrible reasoning. So bad it has even got it's own name as a specific economic fallacy: http://en.wikipedia.org/wiki/Broken_window_fallacy



    It's just as bad as the argument that WW2 saved the world economy from the Depression.
    None taken. However, I would point out a few things to begin with:
    1) I'm no economist
    2) The fallacy is not so bad that it has a name but rather so common that it has one.

    Anyway, moving on to the actual fallacy involved. I read the wiki page and my understanding of the fallacy is such that I do not believe I made it. My understanding is this: that the six francs spent replacing the window are not benefitial because those same francs would have been spent elsewhere. Thus there is no extra money being spent and the act has no extra benefit.

    If my understanding is correct then I believe I did not make this fallacy. I pointed out that the money being spent on the weapons is being channeled back into the economy and is not wasted. It is true that the money being spent is not adding anything, but my point is only that it is not wasting anything.

    My second paragraph addresses the point of this fallacy. I recognise that the argument is that the money could be spent elsewhere (like the 6 francs could have been spent on shoes instead). I don't think I have made the fallacy of arguing that the weapons add to the economy I have rather said that they don't take away from the economy.
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    You are making precisely the broken window fallacy by focusing on what is seen and ignoring what is unseen.

    If "It is true that the money being spent is not adding anything" as you have yourself said, then by definition it is being wasted. Yes, it is being spent! That is what is seen. But it is still being wasted: for that money, (say in the hands of the taxpayers it came from in the first place) could have been used for a whole bunch of useful things. It could have been used to buy goods or services, and thereby eliminate people's wants. It could have been used to invest as capital, and thereby increase the productive power of the economy so more wants are satisfied in the long run. It could have been saved in banks, and thereby enabled more money to be lent out to entrepreneurs. But, none of those things were done. That is what is not seen.

    This is one of Bastiat's essays on an almost exactly parallel topic, employment of soldiers and demobilisation. Can you still not see the similarities between this and your argument?

    A nation is in the same case as a man. When a man wishes to give himself a satisfaction, he has to see whether it is worth what it costs. For a nation, security is the greatest of blessings. If, to acquire it, a hundred thousand men must be mobilized, and a hundred million francs spent, I have nothing to say. It is an enjoyment bought at the price of a sacrifice.

    Let there be no misunderstanding, then, about the point I wish to make in what I have to say on this subject.

    A legislator proposes to discharge a hundred thousand men, which will relieve the taxpayers of a hundred million francs in taxes.

    Suppose we confine ourselves to replying to him: "These one hundred thousand men and these one hundred million francs are indispensable to our national security. It is a sacrifice; but without this sacrifice France would be torn by internal factions or invaded from without." I have no objection here to this argument, which may be true or false as the case may be, but which theoretically does not constitute any economic heresy. The heresy begins when the sacrifice itself is represented as an advantage, because it brings profit to someone.

    Now, if I am not mistaken, no sooner will the author of the proposal have descended from the platform, than an orator will rush up and say:

    "Discharge a hundred thousand men! What are you thinking of? What will become of them? What will they live on? On their earnings? But do you not know that there is unemployment everywhere? That all occupations are oversupplied? Do you wish to throw them on the market to increase the competition and to depress wage rates? Just at the moment when it is difficult to earn a meager living, is it not fortunate that the state is giving bread to a hundred thousand individuals? Consider further that the army consumes wine, clothes, and weapons, that it thus spreads business to the factories and the garrison towns, and that it is nothing less than a godsend to its innumerable suppliers. Do you not tremble at the idea of bringing this immense industrial activity to an end?"

    This speech, we see, concludes in favor of maintaining a hundred thousand soldiers, not because of the nation's need for the services rendered by the army, but for economic reasons. It is these considerations alone that I propose to refute.

    A hundred thousand men, costing the taxpayers a hundred million francs, live as well and provide as good a living for their suppliers as a hundred million francs will allow: that is what is seen.

    But a hundred million francs, coming from the pockets of the taxpayers, ceases to provide a living for these taxpayers and their suppliers, to the extent of a hundred million francs: that is what is not seen. Calculate, figure, and tell me where there is any profit for the mass of the people.

    I will, for my part, tell you where the loss is, and to simplify things, instead of speaking of a hundred thousand men and a hundred million francs, let us talk about one man and a thousand francs.

    Here we are in the village of A. The recruiters make the rounds and muster one man. The tax collectors make their rounds also and raise a thousand francs. The man and the sum are transported to Metz, the one destined to keep the other alive for a year without doing anything. If you look only at Metz, yes, you are right a hundred times; the procedure is very advantageous. But if you turn your eyes to the village of A, you will judge otherwise, for, unless you are blind, you will see that this village has lost a laborer and the thousand francs that would remunerate his labor, and the business which, through the spending of these thousand francs, he would spread about him.

    At first glance it seems as if the loss is compensated. What took place at the village now takes place at Metz, and that is all there is to it. But here is where the loss is. In the village a man dug and labored: he was a worker; at Metz he goes through "Right dress!" and "Left dress!": he is a soldier. The money involved and its circulation are the same in both cases: but in one there were three hundred days of productive labor; in the other there are three hundreds days of unproductive labor, on the supposition, of course, that a part of the army is not indispensable to public security.

    Now comes demobilization. You point out to me a surplus of a hundred thousand workers, intensified competition and the pressure that it exerts on wage rates. That is what you see.

    But here is what you do not see. You do not see that to send home a hundred thousand soldiers is not to do away with a hundred million francs, but to return that money to the taxpayers. You do not see that to throw a hundred thousand workers on the market in this way is to throw in at the same time the hundred million francs destined to pay for their labor; that, as a consequence, the same measure that increases the supply of workers also increases the demand; from which it follows that your lowering of wages is illusory. You do not see that before, as well as after, the demobilization there are a hundred million francs corresponding to the hundred thousand men; that the whole difference consists in this: that before, the country gives the hundred million francs to the hundred thousand men for doing nothing; afterwards, it gives them the money for working. Finally, you do not see that when a taxpayer gives his money, whether to a soldier in exchange for nothing or to a worker in exchange for something, all the more remote consequences of the circulation of this money are the same in both cases: only, in the second case the taxpayer receives something; in the first he receives nothing. Result: a dead loss for the nation.

    The sophism that I am attacking here cannot withstand the test of extended application, which is the touchstone of all theoretical principles. If, all things considered, there is a national profit in increasing the size of the army, why not call the whole male population of the country to the colors?
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    (Original post by DrunkHamster)
    You are making precisely the broken window fallacy by focusing on what is seen and ignoring what is unseen.

    If "It is true that the money being spent is not adding anything" as you have yourself said, then by definition it is being wasted. Yes, it is being spent! That is what is seen. But it is still being wasted: for that money, (say in the hands of the taxpayers it came from in the first place) could have been used for a whole bunch of useful things. It could have been used to buy goods or services, and thereby eliminate people's wants. It could have been used to invest as capital, and thereby increase the productive power of the economy so more wants are satisfied in the long run. It could have been saved in banks, and thereby enabled more money to be lent out to entrepreneurs. But, none of those things were done. That is what is not seen.

    This is one of Bastiat's essays on an almost exactly parallel topic, employment of soldiers and demobilisation. Can you still not see the similarities between this and your argument?
    I think I see Bastiat's point but I think you have applied it incorrectly. He is not saying that the money is wasted overall. Yes town A loses that money but he points out that Metz gains the same money. Thus if we look on a national level no money is wasted.

    His point is that the labour of the soldier is wasted because he does no productive work. The work he does is unproductive and therefore wasted.

    Perhaps that is what you meant. Either way, I now understand the point and concede it.
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    (Original post by UniOfLife)
    I think I see Bastiat's point but I think you have applied it incorrectly. He is not saying that the money is wasted overall. Yes town A loses that money but he points out that Metz gains the same money. Thus if we look on a national level no money is wasted.

    His point is that the labour of the soldier is wasted because he does no productive work. The work he does is unproductive and therefore wasted.

    Perhaps that is what you meant. Either way, I now understand the point and concede it.
    To an economist money is just a means of allocating resources. Money being spent on useless things implies resources are spent on useless things. The money spent on maintaining a nuclear arsenal is just a representation of manpower ( wages ) , machinery and materials ( capital ) and various commodities that are being wasted on the program. This is what an economist mean when they say money is wasted. Resources are wasted. In the short run the amount of money in the economy is constant ( in the long run it increases with inflation ) but resources are always being used. Unnecessary transactions of money typically correspond to wasted resources. This is also why having an unnecessary administration with the justification "it creates jobs" is pointless. The same people could do more useful things, and thus resources are wasted, no matter how many jobs it "creates".
 
 
 
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