Courtesy Reuters

More Guns and Butter

By Murray Weidenbaum

To the Editor:

A fundamental fallacy underlies the analysis of my former Reagan administration colleague Lawrence Korb and Peter Ogden ("Jets or GIs?" November/ December 2006). They are wrong when they endorse the view that "the defense spending levels of the past few years are unsustainable."

We may strongly disagree with how military resources are currently being utilized, but a simple examination of the pertinent data demonstrates that the present level of military spending is sustainable -- as would be a substantially higher level of spending. For example, the portion of GDP devoted to national defense from 2003 to 2005 averaged 4.6 percent, compared with 6.6 percent in the 1970s and 6.9 percent in the 1980s. Similarly, the 18.8 percent of the federal budget apportioned to the Department of Defense in fiscal years 2003-5 is down substantially from the average of 28.8 percent in the 1970s and 25.3 percent in the 1980s.

Very similar patterns emerge when we compare the recent share of capital formation devoted to armaments with the corresponding shares during the Vietnam War, the Gulf War, and the periods of peace in between. The same relationships hold for the share of the nation's research-and-development effort devoted to defense. Most relevant, the military's share of the total national labor force was less than 1 percent from 2003 to 2005, down from 2.5 percent in the 1970s and 1.7 percent in the 1980s.

As an economist, I cannot say that the portion of the nation's resources devoted to national defense is too high or too low. I also leave to others the debate as to how much should be spent on national defense at any given time.

What I can report is that virtually every study of the subject over many decades concludes that -- within a very large margin -- the United States can afford to devote to national defense the amount that the nation decides it needs to maintain national security. An important corollary is that these studies, including my own, also conclude that the health of our nation's economy does not require any particular level of defense spending.

Murray Weidenbaum

Mallinckrodt Distinguished University Professor of Economics, Washington University

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