War Economy

Posted on April 26th, 2004 by mike

All wars bring cheerful economic news at first. They stimulate production. They raise capacity utilization, which helps business cover costs and improve earnings … But the good news doesn’t last. Soon enough, profiteers see their chances. Bottlenecks happen. Prices go up. Long before unemployment disappears, wars generate inflation. Indeed, inflation and the depreciation of private wealth and public debt that it brings is the ages-old way in which governments pay for war.

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