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Regional Military Economy

Top 10 Regional Empire Issues by Dr. Bob Reuschlein
#1. The rise of the Sun Belt and the demise of the Rust Belt is mainly due to the massive transfer of wealth. How? By taxing the low military North more than they get back in military spending and giving excess military spending above the taxes paid in the high military South. Half of the Cold War spending represented the amount transferred from the Northern 28 states to the Southern 22 states. The South had twice as much military spending as the North at the end of the Cold War.
#2. The first proof of this problem is in the unequal growth of the regions in the Bi-Coastal economy report by the congress in 1986. Clustering the states in 17 regional mini economies and running the correlation coefficient the economic growth rates are proportional to the share of the military buildup received, r =0.975. The period of the report covered was 1981-1985 inclusive. (See pages 8-9 in the BOOKLET mentioned in the link at the bottom.) In this military buildup, 15 of the top 18 state increases in military spending were associated with obvious important federal politicians. Thus military spending is about 80% allocated by politics and perhaps 20% allocated by merit.
#3. The second proof of this problem is the unequal unemployment rate changes for the period 1985-1991. Comparing to the military spending changes as a percentage of each state’s economy; for the 78% of America East of the Rockies, the correlation coefficient is r = 0.97, with the states clustered in 12 logical mini-regions. For the remaining four Far West state’s regions, r =0.93. (See pages 10-11 in the BOOKLET mentioned in the link at the bottom)
#4. The third proof of this problem is the military buildup jobs recession after 9-11-01, where the low military states lost three times the jobs compared to the high military states. The national population is equally divided between low and high military states. (See )
#5. Closely related to these problems is the case of the disappearing manufacturing sector of America, largely located in the industrial Midwest Great Lakes states. The higher a state’s military sector, generally, the lower the state’s manufacturing sector. While the correlation may be about r = 0.35 for the states, if clumped into mini-regions like #2 and #3 it would probably be in the nineties like those are, and visually when rank ordered by military spending, the inverse association looks quite compelling. (See pages 4-5 in BOOKLET mentioned in link at bottom)
#6. Comparing military spending to total government spending in the twenty most populous states, the correlation is r = 0.83, very robust. But it is often the case that politicians who say they are for lower government spending usually exclude the military spending that often makes the same states they come from “high government states.”
#7. Among the smaller states, many of the Great Plains and Rocky Mountain states that are low in military spending are nevertheless high in government spending. These same states are usually “net takers” (i.e. federal spending exceeds federal tax revenue) from the federal government even though their politicians often claim to be in favor of lower government spending. These states usually have lots of land owned by the federal government.
#8 Usually the high military states are represented by powerful politicians such as presidents, speakers of the house, senate majority leaders, and key appropriations committee and defense appropriations committee chairpersons. Even lesser leaders like majority leaders, whips, and caucus chairs usually come from high military spending states. (See here for more nuances: )
#9 When a political party goes out of power it usually has less military states leadership and when a political party goes back into power it usually has more high military states leadership.
#10 The major reason one state gets more spending from the federal government than the revenue it sends to Washington DC, is usually due to very uneven distribution of per capita military spending compared to the national average. In 1984 this correlation was r = 0.90 at the height of the Cold War, and in 1994 when the Cold War had ended the correlation was about r = 0.69. In the 1984 Cold War case the variance from the average of the 22 states with a top 25 metropolitan area in them, about 80% of the variance was due to military spending and 20% of the variance was due to all other federal spending. This was true in spite of the fact that military spending was only 25% of total federal spending. In the post Cold War 1994 case, the variance was closer to 50% and 50% even though the federal spending was 15% military and 85% non military. This largely continues into the present. (See )

More military economy details in this 24 page booklet enclosed in each Peace Economics video:
(See page 24 for current situation in BOOKLET in link above)

This apparent pro-military spending local economic stimulus is in sharp contrast to the national nature of military spending as lost capital investment and lost manufacturing productivity. This apparent contradiction is explained on pages 4 and 5 of the BOOKLET in the link above.

Dr. Peace, Dr. Bob Reuschlein, Real Economy Institute
best contact to ask Bob to speak to your group:
to leave message: 608-230-6640
for more info:
(Real Economy and/or Peace Economics free pdf on request by members of the press)
An archive of this yearlong press release campaign can be found at:


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