This arms production isn't adding to economic growth to increase the size of the pie -- it's merely shifting it. Because its outputs are being sent abroad and not in a way that increases the economic efficiency of anything.
If this money were being invested in American business that built products and services sold to Americans, then it would be part of domestic economic growth and the pie would get bigger. But it's not. It's just shifting money instead. The pie size is fixed here.
This seems to assume the economy is a fixed-size pie. Is that a valid assumption?