Tuesday, March 6, 2012

Jobs and defense spending


A defense industry trade association, the Aerospace Industries Association, has calculated that more than one million U.S. jobs might be lost if defense spending cuts reach the one trillion dollar level. The study, reported in the Wall Street Journal, does not indicate the time frame for the one trillion in cuts (Nathan Hodge, “Tank Plant Takes Cover amid Military Cuts,” March 2, 2012, http://online.wsj.com/article/SB10001424052970204778604577243460854210888.html?mod=ITP_pageone_1).

The article reflects the excessive emotion entangled in defense spending debates. First, the U.S. does not spend a trillion dollars per year on defense. Yet the article does not specify the period over which the cuts will occur.

Second, the one million jobs include not only an estimated 350,000 jobs directly affected but also cuts in suppliers, stores in which defense workers shop, etc. In fact, a cut in defense spending will cause a reallocation of employment away from defense related industries and into other industries because the money not spend on defense will be spent on a combination of other government programs, spent by taxpayers who retain earnings rather than giving them to the government, and make more funds available for other investments (to the extent that the government deficit finances its procurement).

The pain of economic adjustment is real. However, money spend on defense procurement is worthless unless the equipment sees actual combat usage or is necessary to deter a war. In other words, post-adjustment the nation gains by spending less on defense and more in other ways.

Third, the world has probably seen its last major tank battle. Buying equipment not required for actual defense needs in no way enhances national defense. Separating economic arguments from defense issues is imperative if the U.S. is to break free of the grip of the legislative-military-industrial complex that puts their interests ahead of actual national interest. Similarly, pushing other nations to buy high priced equipment they do not need (e.g., the Saudi jets that sit rusting on Saudi airfields unused) represents a bankrupt foreign policy designed to benefit narrow special interests at the cost of the public good.

1 comment:

AmericanObserver said...

Precisely. Buying more incredibly expensive weapons that will never be used in wars that will never be fought is madness. Put our national resources to work rebuilding our educational system, our infrastructure, and things we need for a better America. All guns and no butter turns us into the old Soviet Union. We don't want to go down that path...