hvb...
Although I make no claim to being an authority, I do have a modest economic background, both academic and real-world...
We used the "guns and butter" analogy a lot all through the study of economics. The Cliff notes version: vurtually all economic activity creates "wealth" because of the multiplier effect outlined by PJ.
This is true whether the activity is private or by government. However, when the govt. uses increased taxes to finance the activity, the multiplier effect is reduced by the inefficiency of the bureaucracy. The use of debt instruments by government does not reduce the effect as much, as it is not taking money out of circulation. Instead, it "competes" with the market.
The fundamental political argument boils down to whether the economy benefits greater by private industry, or government.
Governmental advocates claim that central control is better "for the common good" (see the Soviet Union, China, Cuba, and every dictatorship; look at Canada, much of Europe, etc.).
Private advocates claim "the market" makes superior choices. That Supply and Demand reigns supreme.
The truth is somewhere in the middle. As a Libertarian (but not an Anarcho-Libertarian like PJ), I tend to side much more with Adam Smith than Karl Marx (like 99.5%).
IMO, "war", in the big picture, neither stimulates nor depresses the creation of wealth. But to protect our economic system-which drives the WHOLE world economy-it may be necessary from time to time. It's like buying life insurance-paying those premiums every quarter seems like a waste of money until the time your family needs it because they lost their own "economic engine". Without defeating through military means those whose sole purpose is the destruction of our economic system, we may very well lose OUR economic engine. It is a very small investment, indeed.
People bitching about war being waged for economic reasons are just disappointed that their personal political priorities are not being addressed. They are much more concerned with losing political power than protection of our economic system.
It is an unfortunate fact of life that war is necessary to be able to build more houses, parks, and schools. It will be so as long as there are those who are bent on the destruction of our eco-political system. And as long as those exist, I am an advocate of more planes, bigger ships, more powerful bombs, and superior military training than them. It's really nickles and dimes compared to the world economy they protect.
As I said once before, my fondest desire is to be liked as a country. But absent that, I want to be feared.