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The Underfunded Pentagon

By Martin Feldstein
March/April 2007
Article Summary and Author Biography

The defense budget of the United States, the world's leading military power throughout the twentieth century, is not enough for the country to confront the threats of the twenty-first. It should be increased -- and can be without negatively affecting the economy. The money is available; it must be joined by political will.

Martin Feldstein is George F. Baker Professor of Economics at Harvard University and President and CEO of the National Bureau of Economic Research.

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Letter to the Editor
DEFENSE SPENDING
Lawrence Spinetta

Spinetta on defense spending and Feldstein's response

PROBABLE CAUSE

Throughout the twentieth century, U.S. military capabilities were sufficient to protect the United States and its allies. For many decades, the United States has been the global leader in military spending, and it continues to be so today. In the current fiscal year, U.S. defense outlays will total roughly $550 billion, reportedly more than the defense expenditures of the next 40 nations combined. Yet this spending is probably not enough to ensure the security of the United States -- and for something as critical as national security, even "probably enough" is inadequate. Handling the new threats facing the United States will require a significant rise in defense spending; the real questions are how much more is needed, what the new funds should be spent on, and how the money can be raised.

There are undoubtedly excesses in some parts of the defense budget and many examples of wasteful spending, but those are inherent features of any government activity. And unlike some areas of government spending where it is possible to consider privatization or a shift of responsibility to states and localities, defense must remain a federal responsibility, unchecked by the disciplining forces of competition. So one cannot expect to achieve dramatic gains from increased efficiency alone.

Deterring other great powers, such as Russia and China, will require Washington to maintain its dominance in conventional warfare and therefore at least to maintain its current level of military spending. But in addition, the United States now faces three new types of threats for which its existing military capacity is either ill suited or insufficient. First, there are relatively small regional powers, such as North Korea, Iran, and Pakistan, that can or will soon be able to strike the United States and its allies with weapons of mass destruction (WMD). Second, there are global nonstate terrorist networks, such as al Qaeda, with visions of re-creating the world order. And third, there are independent terrorists and groups motivated less by a long-term vision of global conquest than by hatred, anti-Americanism, and opposition to their own governments. Each of these threats is exacerbated by the relative ease with which crude WMDs can be developed due to the diffusion of modern technology and the potential emergence of a black market in fissile material...

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