Thursday, May 25, 2017

A 2016 report from the Pentagon claims that 22% of the military’s infrastructure is unnecessary

See Trump's Cost Cutting May Involve Military Closures, But Cities Shouldn't Worry by Adam Millsap of Mercatus.
"Yet there is little evidence that base closures have significant adverse effects on local economies. One study examining base closures from 1970 to 1994 found that the effect of a closure on local (county-level) employment was limited to the actual number of military jobs lost and that there was no negative employment effect on other sectors of the economy. In fact, it actually found evidence of indirect job creation rather than job destruction, though the effect was small. The study also found that, on average, local per capita income was unaffected by a closure.

Another study that explicitly takes into account reutilization of military infrastructure after a closure found that the long-run effects of a closure on local employment were positive overall. In addition to the reutilization of valuable infrastructure, the authors attribute the positive effect to increased federal education assistance that often accompanies a base closure, increased spending by military retirees on non-military-base retailers (instead of the BX and PX) and an increase in optimism as people adjusted to the new circumstances. The authors note that while base closures are never appealing to the workers and communities directly impacted, “the overall picture is most certainly not one of doom and gloom.”"

"But as the research shows, many of the places affected by base closures adapt and turn out just fine: The infrastructure can be refurbished and reused by private companies .

Reutilization is especially important when considering the economic impact of military facilities. Since the products and services provided by the military are not sold on a market and subject to the signals of profit and loss, we have little knowledge about how much people actually value them. This makes it hard to know whether the military’s inputs, including land and infrastructure, are being put to their highest-valued use. And if the land and infrastructure are not being put to their highest-valued use, the economy is not operating as efficiently as it could be.

A former military facility in Key West, the Truman Annex, was developed after being relinquished by the military, and today its hotels and rental homes contribute to the area’s robust tourism industry."

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