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Essay/Term paper: The economics of federal defense policy

Essay, term paper, research paper:  Economics

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The Economics of Federal Defense Policy

Three out of four Americans polled in the 1992 election year believed that the
United States was heading in the wrong direction. With such an overwhelming
consensus, the country hired a new president to attempt to fix the vital issues
at hand. Although both Republicans and Democrats believed that the United States
was still the "sole superpower", the people of the United States saw that their
quality of life was deteriorating. In fact, the signs of economic, social, and
political decay were undeniable.

For example, the wages of production workers in America have declined twenty
percent in the last twenty years due to large corporations shifting their
operations overseas. Over thirty-seven million Americans are without health
insurance due to its exploding costs. There are about sixty million people below
the poverty line; fourteen million of which are children. Our crime rate is at
an all-time high as well as the population in our prison system. The United
States has nineteen preceding nations that have lower infant mortality rates.
Among the twenty most developed countries in the world, the United States has
the highest divorce rate and the highest teen pregnancy rate. The most
incredulous fact of all is that the Pentagon continues to absorb twenty percent
of the federal budget-over a third of which is spent protecting Europe against
an enemy that no longer exists.

In fact, that is the most probable source of America's problems: the budget.
Forty-seven percent of the national federal budget is spent for a military
expense. The National Defense, the topic of this paper, is what is stealing
money from the poor in our own country and lessening our status as the "sole
superpower" of the world.

The National Defense was a program initiated from day one of the United States'
existence. It was a program designed to protect the people of the world, but
primarily the people of this nation. It was designed to protect human rights and
the ideals of democracy and capitalism. However, in lieu of recent events, the
use for such a program is now debatable. The world has changed significantly and
dramatically within the last five years. The threat of an evil empire such as
the Soviet Union is no longer; the Cold War is over.

Ultimately, demilitarization is needed for many reasons. Both Democrats and
Republicans alike supported the development of a gigantic-industrial complex.
Both are content with only minor budget reductions. However, more drastic
measures should be taken in order to move this country into the twenty-first
century successfully. Military spending should be slashed, the Central
Intelligence Agency (CIA) should be dismantled, and the other vestiges of the
Cold War should be removed.


This graph displays the United States' military spending compared to that of its
Top Ten contenders. It shows how overwhelming and exacerbated the United States'
spending really is. Russia and the United Kingdom spend about two hundred fifty
billion dollars less than the United States. In fact, there is a twenty-five
billion dollar difference between the United States and all the other nations

This next graph again shows the outrageous spending habits of the United States
and its Department of Defense. This graph displays the United States compared to
its potential enemies or adversaries. The differences are astronomical. Russia,
the only country that comes close to comparison, is still a mere two hundred
billion dollars behind.


The threat of the Cold War is extinct. For over forty years, the military budget
has been driven by the Soviet threat. Over half the budget was devoted to
defeating a sudden attack by the Warsaw Pact nations on Germany. Now, the ex-
Soviets want to join the North Atlantic Treaty Organization (NATO). In the words
of General Colin Powell," The Red Army is no more." (1) In fact, the economy in
the post-Soviet nations is so terrible that the soldiers are selling their
weapons for food. Malnutrition is incredibly prevalent. According to the CIA and
the Defense Intelligence Agency (DIA), if Russia was to be taken over by a
dictator, it would take ten years for them to reconstitute a military threat to
the west.

The facts are clear. The United States is surrounded by friendly nations on
either side as well as two gigantic oceans. Most of the nations that are strong
enough to be considered a threat are now considered friendly nations. The
possibility of any potential enemies coming close to competing with the defense
tactics and forces of the United States is virtually impossible.

These statistics are also evident to the politicians in Washington. The Bush
Administration and the Joint Chiefs of Staff in 1992 invented the new term for
the enemy in order to avoid a dramatic change to the country's economics. They
created the "threat of the unknown." (2). The military changed its focus to that
of maintaining peace and harmony abroad. Sending troops to Bosnia and Somalia
are two prime examples of the military's effort to provide humanitarian relief.
In a meeting with the House Armed Services Committee, General Colin Powell
brought forth a list of the military events that had occurred over the past five
years. Events included items such as "Just Cause," the capture of Manuel Noriega
in Panama; Desert Storm in the Persian Gulf; "Operation GTMO," which sent
seventeen hundred troops to Cuba in order to care for Haitian refugees; drug
operations in Latin America; "Provide Hope," which delivered supplies to the
former Soviet Union; rescue and relief missions in Somalia and Zaire; and "Firey
Vigil," which intimidated coup plotters in the Philippines. It is obvious to see
to even the average human being that the two hundred fifty billion dollars that
the United States spends on military defense could be spent better and more
efficiently at home.


This graph demonstrates how exactly the government spends our money. A
staggering forty-seven percent of the budget is allocated for military expenses
with fifty-four percent spent on defense alone. As shown, only six percent of
the military budget is spent providing and caring for the men and women who
fought for our country in the Vietnam, Korean, and Gulf wars. In fact, Les Aspin,
the Defense Secretary under Clinton, believes that people like Saddam Hussein of
Iraq and Kim II Sung of North Korea are fueling the defense budget. The
remarkable fact is that their militaries couldn't withstand an attack from the
United States ever. The reason why they pose such a threat is because of the
potential nuclear warfare. The only nuclear bomb ever dropped was in August of
1945. The United States sees these men as mad-men with the nuclear power to
destroy the world. However, I wonder what good will come of the United States'
two hundred fifty billion dollar army when the entire world has been destroyed
by the push of a button.

Aspin also realized that it was entirely possible for the United States to fight
two regional wars simultaneously against Iraq and North Korea, while sustaining
the capacity for a Panama-like intervention in this hemisphere, a Kurdish-level
relief operation, reserve forces for the possibility of an extension on one of
the regional wars, and a foundation of strategic nuclear forces, continental
forces, new weapons research and development, base troops in Europe, and top-
level operations and training. This seems excessive and unrealistic due to the
lack of this scenario actually taking place. It seems that it would be far more
beneficial to utilize this extra money in other areas of need: reducing the
deficit, caring for the elderly, etc.

The ultimate goal for any progressive politician would be to convert the economy
from a war-time economy to a civilian-based economy. It is very important for
our future presidents to figure how to reallocate the defense funds to something
productive for the twenty-first century. Although, politicians who might strive
to do so may have problems being reelected. In the process of slashing the
defense budget, many jobs will be destroyed. The people of this country would
have to patient with a politician who attempted to change the status quo. Often,
people expect immediate change. This kind of change cannot be accomplished
within the four year presidential term. It would take cooperation from the House,
the Senate, and the President for a longer period of time than four years. It
would be a long and potentially painful process that would hopefully accomplish
many achievements. It is time for the country to realize that the Cold War is
over and that it is time for a new way of life.

President Clinton has attempted to reallocate some of the defense budget funds
to programs like the Women, Infants, and Children nutrition program. However,
such a task is only the proverbial drop in the bucket. Funds for education, the
environment , and housing are expected to decline over the next five years.
There have been no commitments to research on electric cars and
telecommunications. There has not been any solid plans concerning the
implementation of mass transit. Undoubtedly, these programs are vital to a new
and powerful technological future. Essentially, military research continues to
dominate the bulk of the federal budget. This leaves only limited resources for
discovering alternative energy sources, efficient manufacture, and "green"
technologies which are surely to dominate the markets of the future.


This graph adequately shows how little the government is doing to help the
people of this country. While the United States ranks at the top of teen
pregnancies and divorce, only a tiny portion of the government spending is
dedicated towards family support. Again, the defense budget's staggering
statistics demonstrate its absurdity. Employment training, housing needs, and
nutrition assistance are much more mandatory than fighting the nonexistent Cold
War enemy.

The United States must confront several issues in order to convert to a
civilian-based economy. First, painless ways to move to a civilian-based economy
must be identified. Second, the ethos of the "intelligence community" need to be
changed by disbanding parts of it and opening its research to international
usage. Third, a comprehensive nuclear and conventional weapons disarmament
should be implemented where all nations take part. Fourth, formulate policies
that take account of the United Nations to ensure that groups and individuals
can be represented on issues of trade, the environment, transnational
peacemaking, international citizenship for the stateless, and human rights.
However, it is rather unlikely that a post-war social reconstruction would
generate the enthusiasm and national purpose that the Cold War did. It is easy
to see that the patriotic way a country comes together to fight an enemy is far
easier than finding a way to agree on issues such as peace and human rights.

As it is shown in the following graph, twenty percent of the federal budget is
spent on military expenses while thirty percent is allocated to social expenses
such as education, housing, social security, and welfare. In other comparable
countries such as the United Kingdom, Germany, France, and Sweden, the ratios
show a dramatic difference in priorities. Sweden could prove to be an example in
the way we should restructure our country. Less than ten percent of their
federal budget is spent on defense, while an overwhelming 65 percent is spent on
various social concerns.


Fortunately, President Clinton is finally moving in the right direction. He is
attempting to cut back on defense as well as seeking economic activities to
replace the military-industrial complex. He plans to reduce military spending by
one hundred eighteen million dollars. Over 460,000 jobs have disappeared since
1990 in the military arena. Military bases have been closed and sometimes sold
to the private sector. $3.9 billion dollars have been spent on dual-use programs,
or programs that incorporate military technology and equipment for non-military

However, for every step forward there seems to be more than a few steps backward.
24,000 contaminated facilities are needing to be cleaned at the cost of $100 to
$400 billion due to toxic spills and nuclear clean-up. Clinton promised "dollar
for dollar" reinvestment for conversion opportunities which was never
implemented. This would be a fantastic reward for those interested in future

It is definitely not an easy task that any president has. He is faced with the
dilemma of reelection possibilities. If they attempt to change the country for
the better, they face the problem of being despised for their ambitions. Even if
they do not do anything and just maintain the status quo they probably will not
be reelected either.

At this point, President Clinton should try to do several constructive things in
attempt to convert the economy. He should determine the spending priorities of
the people of this nation and figure which of those are indicative and vital to
a decent society. Education and training are two great causes. Literacy rates
are on the decline and truancy and drop-outs are on the rise. Creating
infrastructure and communications for the twenty-first century is also important.
The United States is the only first world country without an advanced form of
rapid mass transit. Alternative resources and energies need to be discovered in
order to prevent people like Saddam Hussein from controlling the current
resources. Our oil suppliers in the Middle East are deteriorating at a rapid
rate - it would be wise to start seeking a fuel alternative. The president would
need to express that it will be a wrenching process and encourage public
investment. Whatever the cost, sweeping changes need to occur in order for the
United States to be a continuing world leader.

There is no easy solution to the problems that lie ahead. It is a rapidly
changing world with swift and stern economic competition. It requires risk and
change on our part. The answer that lies to the path of success is the reduction
of military spending and the reallocation of that money into technology and
basic internal improvement. It is as if the United States needs to issue a
temporary isolationist policy, a "closed for remodeling" sign if you will. So
many things could be done to make this country such a better place. So many
lives could be saved from poverty, illiteracy, addictions, and violence if only
the military budget could be spent on education.

In order to be a successful nation, we are going to have to trust a politician
to lead us there. It would have to a person that is dedicated to creating the
best possible nation ever; strong at home and fierce in the international
markets. It would be the ultimate reconstruction period with a complete
revamping of our budget and goal as a country. I just don't know if its possible.
It seems so idealistic. But, it is an exciting prospect none the less.


1. Divided We Fall: Gambling with History in the 90's. By Haynes Johnson. W.W.
Norton & Co., NY, London, 1994.

2. Highwire: From the Backroads to the Beltway. By John Brummett. Hyperion, NY,

3. State of the Union 1994: The Clinton Administration and the Nation in
Profile. By
Richard Caplan and John Feffer. Westview Press, Boulder, 1994.

4. The Agenda: Inside the Clinton White House. By Bob Woodward. Simon &
Schuster, NY, 1994.



1 State of the Union 1994, Page 67. 2 State of the Union 1994, Page 68.

Graphs A State of the Union 1994, Page 63. B State of the Union 1994,
Page 69. C State of the Union 1994, Page 83. D State of the Union 1994,
Page 73. E State of the Union 1994, Page 91.


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