Blog: Military Spending and Inflation

During war time economic growth is often distorted by increased military spending. What the government spends on weapons and military equipment goes directly into GDP increasing top line economic growth. But while producing a bomb, artillery shell, or military vehicle adds to GDP, military hardware provides no long-term productive yield to the domestic economy once it is deployed or destroyed overseas. This is very different than civilian investments like building a factory, house, or consumer appliance.