USS George H.W. Bush (CVN-77) usa navy nuclear aircraft carrier resupplying anchored in the Mediterranean sea while visiting Haifa port, Israel for rest and recreation on 4th of July 2017. By Alexander Turovsky @ Shutterstock.com
At the Cato Institute, Justin Logan explains that when push comes to shove, and budgeters in Congress and the White House have to choose between “Aunt Sally’s hip replacement and an exquisite new defense project,” America will cut defense spending and replace the hip. He writes:
Fiscal hawk Brian Riedl, a senior fellow at the Manhattan Institute, has an article in The Bulwark titled “In Defense of Defense Spending.” He argues that critics of US defense spending possess “a fundamental misunderstanding of federal budgeting, they also ignore looming threats to our national security.” I think he’s completely wrong about the national security questions, but I want to focus here on some of his economic analysis.
As the coauthor of an article titled “Why the U.S. Military Budget Is Foolish and Sustainable,” I have never been someone who thinks US defense spending is the root of all fiscal woes, or that cutting military spending can solve the national debt.
However, Riedl makes several missteps in his economic analysis. He protests that defense spending isn’t a problem because it
- “has been the slowest growing category of federal spending” (emphasis in original) and
- “has in fact declined from half of all federal spending in 1962 to just 13 percent this year,” and “as a share of the economy… from 6 percent to 3 percent of GDP.”
A few thoughts. First: Who cares how quickly defense spending has grown compared to other programs? The sizes of other federal programs’ increases are irrelevant to spending the right amount on defense. Measuring defense spending as a share of overall federal spending or as a share of national economic output can tell us nothing about whether our defense spending is too high, too low, or just right. The country could be broke and threatened, rich and safe, or any combination of those factors.
But the overall size of other federal programs is relevant. Voters frequently oppose tiny programs like foreign aid, but cutting those tiny programs can do little to help pay down the debt or close the nation’s yawning budget deficits. Riedl has been someone who argues for massive reforms to the biggest programs—Social Security and Medicare—to help fix the problem (we agree on this one!) but people who have to win elections haven’t been listening to us. Given that, it seems foolish to put much hope in huge reforms to those programs to fix the problem. It seems more likely it will get worse.
As this graphic makes clear, if Social Security and Medicare/Medicaid aren’t politically ripe for major cuts, that leaves you with interest on the debt, which isn’t amenable to many policy reforms, as well as defense spending and “income security,” which includes things like unemployment compensation, TANF, SNAP, and other welfare programs. The defense budget is going to be an increasingly appetizing target for deficit reduction. If forced to choose between Aunt Sally’s hip replacement and an exquisite new defense project, I suspect I know which voters will choose.
Read more here.
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