Will a war help increase real estate values? Increase boeing hiring? Start inflation? Give goverment something to focus on?

Asked by Walter Northfield, Everett, WA Wed Mar 23, 2011

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Mickie Barnett’s answer
Mickie Barne…, , Marysville, WA
Tue Jul 5, 2011
Highly doubtful but it can increase inflation which artificially increases property values. Even if Boeing receives more contracts for civil defense (more like offense) and transports, the hiring will only serve as a buffer to protect local employment opportunities. Property values increases will be derived from a healthy national economy and not isolated pockets of prosperity.
0 votes
Rob Merhaut, Agent, Bellingham, WA
Thu Mar 24, 2011
Real estate values certainly did not increase in Dresden, Nagasaki, Baghdad or Vicksburg. I doubt values will increase in Tripoli, either.
Our military Industrial complex will certainly increase Boeing hiring, but globalization may mean a lesser impact than we should see from such a use of tax dollars.
Inflation has already begun, via deficit spending by the Republicrats....and subsequent printing of greenbacks.
Government focuses upon increasing government...that's the focus!
1 vote
Tonya Brobeck, , Everett, WA
Wed Mar 23, 2011
And inflation! 30% increase in groceries the last year! I don't know that it will increase values Walter, we have such a giant inventory of bank owned properties on the market and always coming that they just slash prices to beat the next bank so their property will sell. As for hiring, yes, I would think so. Just my opinion...
1 vote
Don Tepper, Agent, Burke, VA
Wed Mar 23, 2011
We should be so lucky as to be discussing "a war." How about three: Iraq, Afghanistan, and Libya?

No, a war generally doesn't help the economy. It can be argued that World War II helped pull America out of the Great Depression, but the various factors were quite different.

To oversimplify, a war results in a lot of expenditure (money, human life, time) on things that provide (in general) little or no return on investment. For example, as has been cited in the news media, the U.S. has fired 161 Tomahawk cruise missiles into Libya. The cruise missles cost $1 million-$1.5 million each. So, just for the missiles alone, we've spent $200 milion. See http://www.foxnews.com/politics/2011/03/23/role-libya-costs-…

If you invested $200 million into the nation's education system, you'd have a measurable return on investment. If you invested that amount into rehabbing some dilapidated buildings in inner cities, you'd have a return on investment. If you invested it into pre-natal or post-natal care, you'd have a return on investment. If you spent it trying to figure out why there's been an explosion in autism, you might have a return on investment. But spending it on missiles? I know, I know. We're there for "humanitarian" reasons. Keep reminding me of that.

But that's just a drop in the bucket. The war in Afghanistan is costing over $2 billion a week. The war in Iraq is down to about $1 billion a week. See http://www.infoplease.com/ipa/A0933935.html And our main return on investment are dead and injured U.S. soldiers and civilians.

Specifically, will it increase real estate values? Real estate values will go up as demand increases. There's both a physical component (more people means more housing) and a psychological component (the more confident people feel in buying, the more likely they are to buy). The wars won't increase demand. It won't put more people in the market for housing. And I doubt that it'll make more people have confidence in buying.

Will it increase Boeing hiring? Perhaps. But recognize that military contracts are long-term things. They take years to ramp up. Boeing recently won the competition for the Air Force tanker contract. That's $35 billion. But it'll be years for that money to start rippling through. See http://nationaljournal.com/nationalsecurity/in-major-upset-b…

And what a lot of people don't understand is that in cases like that--as well as other necessary expenditures such as road repair (we have major crumbling infrastructure problems), the main benefits aren't from the hiring, but from the resultant "product." In the case of road and bridge repair and replace, sure--people will be hired. But the main ROI calculation deals with added efficiencies to the economy. Almost all of us benefit from better roads (coupled with better mass transit).

Will the expenditures start inflation? Well, it sure won't slow it down. That money has to come from somewhere. And that means it'll be borrowed. Remember your law of supply and demand? An increase in demand is going to drive up prices.

Give government something to focus on? It doesn't already have enough to focus on? Wars in Iraq and Afghanistan? An energy crisis. (Remember: Limitations on drilling domestically because of the BP spill. Now limits/slowdowns on nuclear because of the Japanese meltdowns. Gas is already approaching $4 a gallon and it's barely spring.) A paralyzed Congress that can't even pass a budget, so it's resorting to 2- and 3-week extensions. Unemployment that, while coming down, is still well above the norms. A deteriorating educational system. (See, for instance, http://nces.ed.gov/fastfacts/display.asp?id=1) Deteriorating infrastructure. A looming budget crisis, but neither party will address Medicare, Medicaid, Social Security, or defense; instead, the debate is whether to trim NPR funding. A "war on terrorism"? That'll heat up as the mastermind behind the Lockerbee bombing and nightclub bombings gets increasingly irritated at us for trying to kill him. And the list could go on and on.

No, I don't see "a war" (our third, actually, with all three waged against Muslims, by the way) as resulting in many benefits for the United States.
1 vote
Aaron Schrei…, Other Pro, Leavenworth, WA
Wed Mar 23, 2011
I'm not sure that I see a war increasing values. Historically war inflicts apprehension on buyers. But, thankfully Boeing has been doing a huge hire for their latest contracts. The CEO stated in January that they would be hiring 4,000-5,000 in 2011...just wonder how many are based in Seattle? Source: http://www.king5.com/news/local/Boeing-114670359.html
Web Reference:  http://www.amsinspection.com
0 votes
Jirius Isaac, Agent, Kenmore, WA
Wed Mar 23, 2011
I agree with both comments below. we need to stop spending our money trying to control the rest of the world & start helping people here & getting energy independent.
0 votes
BG, Home Buyer, Phoenix, AZ
Wed Mar 23, 2011
higher tax is a certain !
0 votes
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