More defence spending is good for the economy

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Last year, I wrote a post explaining why defence spending tends to increase economic growth. Today, I want to double down with the results from an extremely detailed study of individual procurement contracts in the EU between 2009 and 2023. The beauty of this new analysis is that it allows us to look at the EU specifically and analyse in great detail how defence spending influences the economy.To be honest, I read this analysis a month ago on the day Lord Robertson chastised the UK government for putting the UK in danger because it doesn’t invest enough in defence. A day later, Fiona Hill, a co-author of the UK’s Strategic Defence Review led by Robertson, joined him in criticising the government. Meanwhile, politicians on the left like Diane Abbott accused Robertson of putting ‘guns before butter’ and of cutting welfare in favour of rearmament.As you can imagine, it took me a while to calm down after reading these comments from Diane Abbott and other left-wing politicians, so here we are.In my view, this guns vs butter argument is flawed on at least two levels. First, if we don’t put guns before butter today, we soon may no longer have butter to hand out to people because we are in a war with Russia. And if we lose that war, we might be able to hand out as much butter to the poorest people in our country as Russia does in its.Second, and more importantly, the best way to give people butter is to boost economic growth because that creates jobs, so people can buy butter themselves and increases tax revenues with which to support poor people who need welfare assistance.The cha…