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« Quick Links | Main | » August 22, 2006
The Sustainable Economics of War
Posted by Bill Will Franklin provides an analysis that shows military spending as a historically low percentage of GDP, demonstrating how entitlements have outpaced defense allocations from the Lyndon Johnson era to the present. I recently had the pleasure of spending a bit of time around a few hundred young liberal activists. One refrain I heard over and over again was that the military-industrial complex in the United States was growing larger than it has ever been, taking into account the entire course of American history. Creeping toward totalitarian fascism, we apparently are. He then displays this chart, which shows military defense spending at 3.9% of GDP in 2005:
There's one thing missing from this analysis: the 3.9% figure is based on the Defense Department's officially recognized defense spending for FY 2005, about $420.7 billion. This budget leaves out the spending for the wars in Iraq and Afghanistan, which have fallen under a series of supplemental funding bills (pdf) that totalled $420 billion between September 2001 and June 2006. Assuming this amount was instead budgeted by fiscal year in an even distribution, the real total would include another 88.4 billion in 2005, bringing actual defense spending to $509.1 billion, or 4.7% of GDP, not 3.9%. This quibble aside, Franklin's overall argument stays strong, as total defense spending of 4.7% of GDP remains below spending for all major wars from WWII forward, on par with allocations around the first Gulf War and below expenditures during Ronald Reagan's peacetime military build-up. Strictly as a historical proportion of the US Economy, the GWoT (including Iraq) would appear to be economically sustainable, this sustainability hinging upon growth in other aspects of the budget, including entitlements. One caveat: limited time has perevented me from looking at whether FY defense spending includes large expenditures on weapons R&D and new systems, such as the F-22 Raptor. It's crucial to determine where those costs come into the mix. Feel free to poke holes in my assumptions. (Via Dinocrat, who argues that the deficit as a proportion of the economy is rather small.) (And Dinocrat link via Bruce Kesler at the Democracy Project, who suffers from "idiot fatigue.") Posted by Bill at August 22, 2006 10:09 AM | TrackBack (2) Trackback PingsTrackBack URL for this entry: CommentsF-22 RDT&E should be included in DOD budgets, b/c those systems are already in production. What isn't necessarily included are pre-production fly-offs. Thus, with some quarters talking about a new manned bomber, any R&D into such a program by, say, Northrop-Grumman or Lockheed-Martin would almost certainly not be included in formal DOD funding. Posted by: Lurking Observer at August 22, 2006 11:21 AM Thanks. Any references or ideas on the numbers we're talking? I suspect that strictly R&D would not significantly affect the above conclusions ... Posted by: Bill from INDC at August 22, 2006 11:24 AM Also, Bill, who's to say what else has been left out of the 2005 and all previous years' "official" budgets? There's no real way to know if apples are being compared to apples with these budgets... I'm reminded of Bjorn Lomberg's writings in the Skeptical Environmentalist: essentially when people are saying the military-industrial complex was growing larger than ever, they are talking about shear dollar amounts. They have little interest in the relative spending on such things because those numbers (as shown) are not supporting their argument. Common tactic in many movements - known probably to the organizers of the movement, but not necessarily to the minions. Posted by: Scoob Weren't there also supplements to last year's budget for hrricane relief? It may only be small potatoes anyhow, less than $1 Billion. Posted by: rbj at August 23, 2006 08:50 AM If these additional expenditures were excluded from the 2005 numbers, then they would also be excluded from the previous years' numbers as well. So the % of GDP would stay the same across the years (unless there's less R&D, etc. in any given year). Posted by: Trubador at August 24, 2006 04:12 PM unless there's less R&D, etc. in any given year Well, new systems are almost generational things, so the addition might not be quite linear. And to the liberal point that the military industrial complex is gaining ground, we'd have to know if these systems and R&D are costing a lot more money. But you raise the relevant question in your point. Posted by: Bill from INDC at August 24, 2006 06:48 PM ionolsen23 I like your site Posted by: pipetka at October 20, 2006 03:07 PM ionolsen24 I am really impressed! www_4_2 Posted by: kartoshka at October 21, 2006 02:59 PM ionolsen40 Great website! Bookmarked! I am impressed at your work! Posted by: volosok at November 6, 2006 11:38 AM 69c49c9c0130 Great work universal life insurance quote universal life insurance quote Posted by: universal life insurance quote at November 27, 2006 02:21 PM jonny982 Posted by: jonny612 at December 8, 2006 09:46 AM 895418a161fe Great work Posted by: teen bondage at December 26, 2006 11:49 AM |
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