17 Aug 16. Keynesian Theory Alive In Pentagon Spending. If you’ve been listening to the presidential campaign, you might think our military was significantly, even dangerously, underfunded. For months, we have consistently heard that Pentagon funding has declined precipitously, and that the military has been “gutted” in recent years. The trouble is, that’s just not true.
The United States has averaged higher levels of defense spending under President Barack Obama compared to the George W. Bush administration, even when adjusted for inflation. Indeed, defense spending in 2010 and 2011 exceeded any year since World War II. But instead of spending more, the nation should invest smarter, helping the warfighter in the air, at sea, and on the ground in ways that make both the country and our military safer, rather than aiding job seekers and the politically connected back home.
Some who believe our military is declining have proposed that at least 4 percent of gross domestic product go to Pentagon spending — “Four Percent for Freedom.” However, this plan has neither emanated from a coherent strategic vision for the role of the military nor considered our security goals, the threat environment, or our fiscal situation. Without a clear strategy, 4 percent could be too much or too little. Its boosters don’t have a rationale for the arbitrary increase to 4 percent of GDP; they’ve just picked a big, round number.
This idea amounts to throwing good money after bad.
The Pentagon is far from cash-strapped. The total request for next year’s Pentagon budget is a robust $583bn, more than half the federal discretionary budget. To reach 4 percent of GDP, the U.S. would have to increase military spending next year by more than 20 percent, or nearly $120bn.
The Pentagon often spends unwisely, hampered by cronyism and congressional parochialism. Increasing funding without underlying reform would only exacerbate the bloat and inefficiency we already see.
Cronyism is so entrenched in the defense bureaucracy that even when the Pentagon tries to cut a wasteful program, parochial interests decry the potential loss of jobs. This is pure military Keynesian economics, often advanced by supposed conservative champions of free markets. Increased military expenditures, they argue, will be a cushion against economic downturn. But the military is not a jobs program.
Special interests have long treated the massive Pentagon budget as a dumping ground for programs that don’t make us safer. For instance, until last year, Congress required the Pentagon to ship coal from Pennsylvania to Germany to heat U.S. military installations. Why? Because in the 1960s, some Pennsylvania congressmen wanted to prop up the declining fortunes of the anthracite coal industry in their state. Last year, the House voted 252-179 to strip the requirement and it was stopped. But like a legislative zombie, it was resurrected this year. The House spoke again, rejecting the provision with an even bigger majority. Hopefully that was its death knell.
Unfortunately, this was an exception as the annual defense spending bill continues to impose onerous and expensive requirements on the military in the service of favored industries. Where’s the respect for taxpayers? These programs should be competitively bid across all potential government contractors. Set an honest standard for the contractors to meet and award the contract to the lowest responsive bidder.
Unfortunately, defense contractors are very good at reading the political tea leaves. Major weapons programs, like the monstrously expensive F-35, are touted by their manufacturers and the military services for the jobs they bring or maintain in congressional districts rather than their military value (or lack thereof).
It’s also not unusual for the lobbyists and service advocates to charge up to Capitol Hill carrying maps showing a supplier in every state in the country for one weapon system or another. Under pressure, memb