What's wrong with this headline?

"Defense spending gives boost to economy"

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The "government spending

The "government spending multiplier" is a favorite construct of Keynesian economics, used by intermediate macro profs to gleefully explain to impressionable young econ majors how wonderful is Government Spending (as opposed to consumer spending) for everyone.

There seems to be a little of that being thrown around in this news story.

Is that what you're getting at?

It could also be said that they're simply generalizing too much when they write "economy" here. The frequency and size of new defense contract signings might be spiking, but if the rest of the economy is in the doldrums, is it fair to lump the huge gains in the defense industry in with everything else, thus affecting the average reported GDP growth?

Kevin, The headline is very

Kevin,

The headline is very similar to the headline mentioned in the article below. Spending by itself cannot improve the economy.

Oops - meant specifically

Oops - meant specifically government spending cannot by itself improve the economy.

Granted there is no single

Granted there is no single type of government spending that can spur the economy, I do think that specifically defense spending is a good catalyst.

First, from what I can see, is that most defense contractors like myself, when employed live a middle-class lifestyle, which is not the case when the government spends money on many social programs. Typically, a social worker/teacher/policeman/etc make much less than your average defense contractor and therefore spend much less.

Second, the military has a way of introducing and promoting new technologies into the economy such as the Internet, GPS, plastics, and countless others. The new technologies help spawn new industries to help the economy grow. Since the military is not in the business of making money and they have deep pockets, they can invest in large endeavors. Before you say it, I agree there is a tremendous amount of wasted money.

Granted there is no single

Granted there is no single type of government spending that can spur the economy, I do think that specifically defense spending is a good catalyst.

Doesn't the second part of this sentence contradict the first?

Before you say it, I agree there is a tremendous amount of wasted money.

It's not about waste. It's about the fact that the money used for govt spending has to come from somewhere.