Wikipedia tells us that the concept of a “permanent war economy” originated in 1944. Such a war economy, it was predicted, would be one in which there would be a post-WWII arms race. It was argued at the time that:
the USA would retain the character of a war economy; even in peacetime, American military expenditures would remain large, reducing the percentage of unemployed compared to the 1930s.
The concept was also used by U.S. businessman and Secretary of Defense Charles E. Wilson to refer to an institutionalized war economy, a semi-command-type economy which is directed by corporation executives, based on military industry, and funded by state social spending…whereby the collusion between militarism and war profiteering are manifest as a permanently subsidized industry.
Wilson warned at the close of the war that the U.S. must not return to a civilian economy, but must keep to a “permanent war economy.” Wilson was made Secretary of Defense under Dwight D. Eisenhower, and was largely instrumental in reforming the Pentagon as an instrument for facilitating a closer relationship between the military and industry.
The military, originally conceived as a small order fed by state militia, has now become an empire, the largest and most expensive feature of our government.