Defense Investment Strategy

The national security strategy of the United States since World War II has changed frequently during the course of eight administrations and two wars. But it has also had an underlying consistency, driven by three major factors: the cold war, our position as leader of the Western world and our economic strength. In the 1990s, however, our national security strategy is likely to be very different as the cold war abates, our global political leadership role evolves from one of dominance to that of senior partner, and our economy is stressed by actions to reduce the budget and trade deficits.

Most significant are the revolutionary changes under way in the Soviet political and economic systems. Under Mikhail Gorbachev's leadership the Soviet Union is experimenting with a major restructuring of its economic system in an attempt to revive its stagnant economy. At the same time Gorbachev has introduced "new thinking" into Soviet foreign policy, which includes promises of unilateral reductions in the Soviet defense structure and proposals for treaties that would make deep cuts in NATO and Warsaw Pact forces.

It is clear that the Bush Administration will have to formulate a new national security policy that recognizes the new world that is emerging. Such a policy should seek to seize the opportunities presented. Thus, if we could negotiate a major reduction of Soviet forces in Eastern Europe, and perhaps in European Russia as well, we could strengthen our security while easing pressure on our budget.

On the other hand, we must recognize the risks inherent in the current volatility in the world. There is a danger that the West will begin to disarm on the basis of Gorbachev's promises, without waiting for concrete actions. Furthermore, there is every reason to doubt that Gorbachev will succeed in completing perestroika, or restructuring, and some reason to question how long he can remain in power. A neo-Stalinist assuming power after we have disarmed would present a particularly dangerous situation. Finally, threats in other regions are likely to increase in a turbulent world.

A new national security policy thus must take account of these complexities. This article will deal with one aspect of such a policy: namely, how to structure a defense investment strategy that recognizes both the opportunities and the risks in the new political and economic dynamics.

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