Friday, November 07, 2008

The Unbearable Lightness of Barney [Proposal to Cut Defense by 25%]

This is only a cursory analysis of the budget at its most superficial level, but it is enough to reveal that Barney Frank's desire to cut defense by 25 percent is either fantasy or lunacy--or a cynical attempt to play to the pacifist wing of his own party while distracting attention from his own culpability for the current financial crisis. In any case, Frank is very much alone in his desire to make such deep cuts in defense (though Obama makes noises of this sort from time to time, he is quick to backtrack). In fact, there is an emerging consensus that the U.S. must maintain its defense spending at close to its present levels for the foreseeable future.

The best way to understand what that means is defense as a percentage of gross domestic product (GDP). Though it is commonly believed that defense spending is at unprecedented levels (it is, if one just counts dollars), relative to the size of our economy, we are only spending about 4 to 4.5 percent of GDP on defense. This compares to 11.7 percent during the Korean War, 9.8 percent during the Vietnam War, 6 percent during the Reagan defense buildup, and 4.6 percent during the first Gulf War. Despite fighting a war on two fronts for six years while simultaneously attempting to modernize our forces, despite spending more money on defense than ever before, our economic growth has outpaced the growth of the defense budget by a wide margin. From an historical perspective, current spending levels are both affordable and the minimum appropriate level, given the global security situation.

The real threat to the defense budget comes from what has been called "entitlement squeeze"; i.e., the growth of "entitlement programs" such as Medicare, Medicaid, Social Security and the like, which go up every year in response to inflation and new government mandates, without Congress even having to appropriate the money--it's just taken off the top, automatically. That leaves less and less room for "discretionary' funding--money which Congress has to appropriate and authorize every year. Defense constitutes the single largest pile of discretionary funds, and is also the one with the least domestic support, since its benefits are not visible (unless there is a war).

No comments: