Last modified on February 10, 2025, at 23:22

Guns and butter economic concept

The guns and butter economic concept describes the government allocation to defense spending versus social programs.[1]

In the 1980s the Reagan administration argued that America could have prosperity while funding a large military budget,[2] both guns and butter under the slogan "Peace Through Strength".[3]

Guns and butter curve

According to Investopedia: "The guns-and-butter curve is the classic economic example of the production possibility curve, which demonstrates the idea of opportunity cost. In a theoretical economy with only two goods, a choice must be made between how much of each good to produce. As an economy produces more guns (military spending) it must reduce its production of butter (food), and vice versa."[4]

External links

References

  1. ↑ What Does "Guns and Butter" Mean in Government Spending?, Investopedia
  2. ↑ Reagan's guns and butter, By WITH ANALYSIS FROM MONITOR CORRESPONDENTS AROUND THE WORLD EDITED BY HILARY DEVRIES, March 05, 1981. csmonitor.com
  3. ↑ Peace Through Strength, Ronald Reagan Presidential Library.
  4. ↑ Guns-and-Butter Curve: Definition and How It Works, Investopedia