When he's not fear-mongering about the attacks America will face if the defense budget is cut, Defense Secretary Leon Panetta is telling the nation those cuts will lead to higher unemployment.

Well, maybe. But not in comparison to budget cuts on the domestic side.

The study’s authors, economists Robert Pollin and Heidi Garret-Peltier of the Political Economy Research Institute, used statistics from the U.S. Department of Commerce, the Bureau of Labor Statistics and other sources to deduce how many jobs are created by public spending in various arenas. Among them, military spending was the lowest, creating fewer jobs per billion dollars spent than even consumer-oriented tax cuts. [...] Averaged between the three domestic spending priorities of clean energy, health care, and education, those areas create about twice as many jobs per dollar spent as military expenditures. The lower numbers for clean energy and health care spending still create 50 percent more jobs than the military category, and results from putting money into education will mean vastly more employment opportunities.

That's from a new study [PDF] from the Massachusetts Institute of Technology (MIT).

Dean Baker comments:

[I]f the point of spending is to create jobs, then the military is the last place that we would want to put our dollars. But, many in Washington believe in the military spending fairy who blesses the dollars spent on the military with unmatched job creating power that has no basis in normal economic analysis.

Many in Washington also believe (or say they do, anyway) that millionaires are job creators and cutting taxes for them (but not the middle class) will fix the economy. It'd be nice to think that a study from an institution as respected as MIT would help to destroy this myth, but it probably won't.