Guns versus butter model

Researchers in political economy have viewed the trade-off between military and consumer spending as a useful predictor of election success.

The National Defense Act of 1916 directed the president to select a site for the artificial production of nitrates within the United States.

It was not until September 1917, several months after the United States entered the war, that Wilson selected Muscle Shoals, Alabama, after more than a year of competition among political rivals.

A deadlock in the Congress was broken when South Carolina Senator Ellison D. Smith sponsored the National Defense Act of 1916 that directed "the Secretary of Agriculture to manufacture nitrates for fertilizers in peace and munitions in war at water power sites designated by the President."

[4] Tax expert Albert Lepawsky stated in 1941, "Contrary to the popular slogan, it is not a question of guns versus butter" because basic food supplies will not be cut.

[5]"Butter" represents nonsecurity goods that increase social welfare, such as schools, hospitals, parks, and roads.

"Guns" refer to security goods such as personnel—both troops and civilian support staff—as well as military equipment like weapons, ships, or tanks.

In a speech on January 17, 1936, Minister of Propaganda Joseph Goebbels stated: "We can do without butter, but, despite all our love of peace, not without arms.

"[9] Lyndon B. Johnson's Great Society programs in the 1960s, when he was President of the United States, are examples of the guns versus butter model.

In his "Chance For Peace" speech in 1953, he referred to this very trade-off, giving specific examples:Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed.

The production possibilities frontier (PPF) for guns versus butter. Points like X that are outside the PPF are impossible to achieve. Points such as B , C , and D illustrate the trade-off between guns and butter: at these levels of production, producing more of one requires producing less of the other. Points located along the PPF curve represent sustainable combinations of each type of production in a world where scarcity is a binding constrain. A , however, is inside of the PPF and represents a combination of output that is not utilizing all available resources.