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Guns or Butter?

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It's a question of protection or welfare...

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"We can do without butter, but, despite all our love of peace, not without arms. One cannot shoot with butter, but with guns." (Joseph Goebbels)

Can we really do without butter?  How true is this statement and what exactly does it mean?  To roughly define it, it just a choice for the government to choose whether to spend its money on “Butter” or  food and services for its citizens or “guns” which is money spent by the government for Military defense.  The truth of the matter is, that every nation is faced with the decision to choose either guns or butter.  As Americans, during the past few years this decision has directly hit home.  We’ve spent over 280 billion dollars on the war in the middle east, 280 that could have been used somewhere else – such decision falls under the category of opportunity Cost. 

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Opportunity Cost

Random U.S. Econ Statistics as of 11/28/06
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Real GDP  $13,308.3 billion  1.6% annual rate

 

Unemployment 4.4%

 

National Debt $8,540,063,491,140.09

 

 

 

Opportunity cost is the cost of something in terms of an opportunity forgone and the benefits that could be received from that opportunity, or the most valuable forgone alternative.  How does this apply to the issue of Guns and Butter?  Well easy.    Just like as individuals we have expenses so does the government; and just like we choose to invest money on things we find most important, So two options arise, either the idea of debt or taking money from other departments.

But Obviously, the United States isn’t the only country that has chosen power over its the welfare of its citizens.  North Korea puts 16 percent of its output to the military.  The opporutniyt cost of this decision is reduced output of food.  A source tells that with all the defense expenses North Korea can now only feed fewer than 100,000 people out of the 6.1 that reside in the Country. 

 

Guns and Butter swifts the production possibilities curve (PPC) or the “transformation curve” is a graph that depicts the trade-off between any two items produced (named after John Forbes Nash, who proposed it) is a kind of solution concept of a game involving two or more players, where no player has anything to gain by changing only his or her own strategy unilaterally. If each player has chosen a strategy and no player can benefit by changing his or her strategy while the other players keep theirs unchanged, then the current set of strategy choices and the corresponding payoffs constitute a Nash equilibrium.

Every nation has ongoing issues about Guns vs. Butter.  “There is an increasing realization that the government pie can't keep growing at past rates, and if you give more to defense, you must give less to everything else," he said. "What is going on now is just a precursor of more difficult decisions to come." Congressional Economist Robert W. Hartman

 

Needless to say, both sides have their advantages and disadvantages. 

Needless to say, so will you “'Stand with President Bush on increased defense spending that better prepares and protects our military?”

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