Comment by hyperpape | Hacker News Reader

Comment by hyperpape | Hacker News Reader

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You really are wrong. There is a reason the broken window fallacy is one of the most famed concepts in economics.

> There is no downside here form the US perspective. Every dollar spent is returned in ways that no other expenditure could replicate.

Suppose we gave "American aid." Instead of giving military items to Ukraine, we pick the names of 10 millions of Americans out a hat, and buy them things. Only restriction is it has to be made in America.

This has all the same effects on the US economy as military aid to Ukraine. It pays the salaries of some people in the US. It uses some raw materials that we have to buy. It costs us in taxes. It diverts some labor to whatever we're buying for the American consumers, and away from all other industries (this can be inflationary).

But the difference is, at the end of the day, those 10 millions Americans have something they didn't have before. America is slightly richer than if we'd given stuff to Ukraine.

So the aid to Ukraine is more beneficial to the US than if we were giving Ukraine money to buy Chinese goods, but still less directly beneficial to the US than if we spent the money on ourselves.

P.S. Like the grandparent post, I'm not bothered by this. I think it's appropriate to aid Ukraine, but it has a real cost to the US. I'm just bothered by the fact that you're so loudly getting the economics wrong.

Yes, but the winners of your lottery won't get missiles and tanks. I hope not, at least.

The US want a strong army, a debatable policy, but that's how it is. A strong army needs to be maintained, otherwise, well, look at Russia. And this is done by keeping people active, both soldiers and suppliers. If instead of building weapons, they decided to give random Americans what they want, like cars, computers, houses, whatever, sure, there will be some happier Americans, but also a weaker army, that may not be fit for the what they may be needed for in the future.

If you want to argue "this costs the US money, but it's worth the cost, because it has a benefit to our preparedness", that's one thing.

But from the article:

> This makes it “a misnomer” to call the $68 billion he calculates we have spent to arm Ukraine “aid.”

I really think the article, and people commenting in this thread, are blurring the lines between idea "this might be good for US military preparedness" (arguably true) with "this is a free lunch because it's paying american workers" (just false).

To summarize my position as unambiguously as possible: there may be second-order benefits, but aid to Ukraine is an economic cost to the US, not a free lunch. If you want to argue for non-economic benefits, I'm not saying anything in this thread that contradicts you.

I think you and OP are being pedantic by not considering the invaluable data, intelligence, and geopolitical impacts, all of which play an indisputable role in fueling the American economy and keeping that economy central to the global economy in and a rule-making position. A dollar spent on defense gets a bigger return than virtually any place you could take that dollar from, and some of the gains form that dollar are literally irreplaceable.

No, you're just having a totally different conversation.

I already said there are absolutely ancillary benefits. But that doesn't mean it's not costing money. It's costing a lot of money! The article is trying to make the point that the money is just coming back to the American economy and therefore, in a sense, isn't "costing" us. But that's false. We are spending real money.

Is the money worth it to affect the war effort? Of course. But it's real money being spent. It's not "coming back to us".

As I've restated several different ways, the economic gains from arms transfers are very likely to be a net gain for the US economy. It may not show up neatly on a P+L statement, but the magnitude of the potential gains vastly outweighs any trade-offs.

Here is a chart showing US-Ukrainian trade before the invasion: https://www.bis.doc.gov/index.php/country-papers/2618-2019-s...

Ukraine was a growing trade partner with a trade balance that benefited the US and all those numbers go to 0 and stay there if it become a Russian puppet state. That's just one of many examples of how these arms transfers can provide a real, material gain to the US economy, which, as I have stated, cannot be replicated by spending money in any other way. It's not some fluffy "ancillary" benefit.

That's all great, maybe. We can certainly hope so.

But that's not what the article is arguing, and that's not what I'm arguing against.

Like I said, you're having a totally separate conversation. But you're framing it as some kind of rebuttal to what I'm saying. And it's just not.

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