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Defense Budgets 101: The truth about military spending

Defense Budgets 101: The truth about military spending

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Published by: American Enterprise Institute on Nov 15, 2012
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11/15/2012

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Defense Budgets 101:
The Truth about US Military Spending
 
To incentivize a long-term debt reduction deal, members of Congress last year set up painful mandatory cuts called 
sequestration. Because budget negotiations failed, America’s men and women in uniform will suffer nearly $500 billion
in cuts over the next decade 
 –
unless Congress acts by Jan. 2. This 10 percent chop comes on top of more than $800 billion in cuts already imposed by the Obama administration. Secretary of Defense Leon Panetta says sequestration 
would be “devastating” but others contend the world’s mightiest military needs a trim. What are the facts?
 
Defense spending doubled over
the past decade. Can’t we return to
previous levels? 
No. That would mean returning to an era when general readiness was at a nadir and equipment was aging. Excluding funds associated with war fighting in Iraq, Afghanistan, and the global war on terror, the defense budget from 2001 to 2008 increased by just 4 percent annually, adjusted for inflation.
But aren’t today’s defense budgets at historic highs?
 
In 
constant, “real” dollars, yes. But a better way to gauge the “cost” of defense is by measuring it as a percentage of the
US economy. In that respect, the economic burden of defense has been cut almost in half, from a 50-year Cold-War average of about 7 percent to 4.1 percent today (3.4 percent without war costs).
We spend more on defense
than many other nations combined. Isn’t that excessive?
 
Not if you look at what we ask our military to do and the value it generates. Our preeminence yields enormous strategic returns: (1) It protects the security and prosperity of the United States and its allies; ( 
2) It amplifies America’s diplomatic 
and economic leadership; (3) It prevents the outbreak of great-power wars so common in previous centuries; and (4) It preserves the international order in the face of aggressive, illiberal threats. These benefits are a bargain at 4 cents on the dollar.
Sequestration hits defense and
domestic programs equally. Fair’s fair, right?
 
Sequestration does virtually nothing 
to address the source of the federal government’s fiscal problem,
which is the unchecked growth in entitlement spending. In 2012, Medicare, Medicaid, and Social Security accounted for more than $1.5 trillion in federal spending, compared to $1.2 trillion for total discretionary spending, about half of which was defense. Think about it this way: defense and discretionary spending and entitlements and debt service are not equal slices of the budget pie; indeed, one of the smaller slices is taking a disproportionately high cut. That is not an equal share. Nor is it right to jeopardize the most fundamental function of government 
protecting its people.
We’ve all heard stori
es about $1,000 hammers. Surely there is waste to be cut? 
There will always be waste in government, but the military is demonstrably one of the most efficient branches of government. Most Americans would love it if the postal service ran as well as the military.
Look me in the eye and tell me the F-35 program is not an outrageous waste.
We agree it’s been a fiscal debacle—
largely because of government mismanagement. Remember, the F-35 program was originally justified as an efficiency measure. We can still realize that efficiency if we scale production properly.Ending it means loss of crucial air superiority, billions of dollars, and decades of effort.
Given our fiscal problems, shouldn’t we rely more on “offshore balancing”?
 
It’s tempting, but 
it undercuts deterrence and weakens ties to allies. Lasting victories are most often the result of onshore intervention. It is the triumph of hope over experience to think that we can avoid that requirement in future engagements.
Does the size of the military
matter, given how much more today’s ships and planes can do?
 
No matter how advanced, today’s ships and planes still 
cannot be in two places at once, nor can they shrink the size of the skies or oceans. Numbers matter in war, and, for deterrence, in peace. The problem with the US military is not just that it is smaller than it used to be, but that, in a dangerous world, it is smaller than it needs to be.

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