Economic debate about military spending and the welfare state

In the current state election campaigns, the AfD and BSW are criticizing the increasing public spending on armaments and support for Ukraine and are calling for the money to be spent on pensions, health care or nursing services. What should we make of this from an economic perspective? Does military spending reduce prosperity in Germany and endanger the welfare state?

Proponents of higher defense spending counter that defense spending creates demand among German industrial companies. This could offset failures in other sectors, such as the auto industry. Armament spending is therefore not only a cost factor, but also an economic stimulus program for the German economy.

This is only partially convincing. It is true that defense orders have a positive short-term economic effect when capacity is idle. If defense spending were reduced and social spending increased instead, there would also be a positive demand effect in the short term.

In the medium to long term, if more workers are deployed in the defense industry, there will be a lack of them in other sectors. Since these are primarily engineers and other well-educated employees, it can be assumed that they could also be well employed elsewhere.