Why did nations used to go to war for all of history in tough times? - Politics Forum.org | PoFo

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#15091890
This will come back to current events in the end.

There were several reasons.
1] In war there is a tendency for the nation's people to rally round the flag so to speak.
2] In a war it is easier for the leaders to quell dissent by saying it is treason.
But, I want to add a 3rd reason.
3] In a war the leaders commonly borrowed to finance the war.

This money was often mostly spent inside the nation. If it was used to buy stuff from outside the nation it was less effective or not effective at all for my point. An examples of this from history that I have read about is Spain in about 1588,when it could not make quality cannon and had to buy them from foreign suppliers.

So, if it was used inside the nation it added to the money supply and this was what we now call a fiscal stimulus. It adds to the money supply because the lenders think they have money in savings and the recipients of the payments resulting from the spending do have the money.
. . This fiscal stimulus gave someone in the nation more income, often many people got more income. they spent this income and got stuff, but this just moved the income on to someone else. He would likely spend it for more stuff he wanted and so on, until someone saved it.
. . So, a nation at war was a happy nation. At least until its young men died or it lost the war and suffered from that.

MMT says there is NO *reason* why nations can't do this now, even in peacetime. This because the world, except the EU, is now off the gold standard.
The massive sums of deficit spending being used to prop-up the economy which has been hit by the coronavirus illustrate this clearly.
#15091978
It distracts the populace from taking out their problems on their rulers. It's easier to blame someone else, and have them focus their hate on them. Someone else plays the scapegoat.

It spurs on industry and the promise of financial rewards is a good motivator.

There's more reasons, but I can't think of them off the top of my head, at this time.

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