Epiphany about "going to war with army you have"/underarming your army

[1932]

A couple months ago I read one of the best biographies I've ever read: John Kenneth Galbraith: His Life, His Politics, His Economics by Richard Parker http://www.amazon.com/John-Kenneth-Galbraith-Politics-Economics/dp/0374281688

In it, Richard Parker writes about how 20th century Democratic and Republican presidents addressed the risk of inflation while either investing in infrastructure to get out of the Great Depression and other depressions (FDR, JFK and Nixon) or while building up armies to fight wars +/or communists (FDR, Truman, LBJ, Nixon).

Parker explains how fighting wars inevitably creates inflationary pressure because the government becomes a market competitor for scarce materials. Now, inflation is a huge concern for the wealthy. If you're poor and you have nothing, you worry less about inflation eating into the value of your assets (so long as wages are inflating too). However, if you're rich and you have a lot, inflation worries you a great deal because it means you have less wealth and power even if you're just standing still.

After reading this book, I wondered, "where's the inflation today?" Afterall, we are spending billions and billions on a war that is taking us nowhere.

I think part of the answer to that question is that working people are standing still and falling back with their wages, so, perhaps, if the army weren't buying Hummers, there might actually be less consumer demand. So, rather than having a war which increases demand, Iraq is one of the few things holding demand steady (ie, it's a subsidy for a lot of industries meant to make up for the fact that working people aren't doing so well since 2000).

I think the other part of the asnwer to the question lies in the fact that it appears that undersupplying the army might not be inadvertant. It might be done intentionally in order to prevent inflation. What if the army had to provide body armor and plating for all those vehicles? Would kevlar prices skyrocket? Would resources shift to supplying the army that would reduce supply of consumer goods and then drive up their prices?

I might be way off here, but I know that inflation must be an obsession with the Republican Bush government, and I believe that undersupplying the army wasn't just an oversight -- there must be some level of design and purpose to it. Thus, today's epiphany: I think that the Iraq invasion might be conducted in a way balance profitability for corporations with holding back inflation and that undersupplying the army is part of the plan that allows Republicans to walk that tightrope.