The Price of Power

The looming battle over the defense budget could produce a useful national discussion about American foreign and defense policy. But we would need to begin by dispensing with the most commonly repeated fallacy: that cutting defense is essential to restoring the nation’s fiscal health. People can be forgiven for believing this myth, given how often they hear it. Typical is a recent Foreign Affairs article claiming that the United States faces “a watershed moment” and “must decide whether to increase its already massive debt in order to continue being the world’s sheriff or restrain its military missions and focus on economic recovery.”

This is nonsense. No serious budget analyst or economist believes that cutting the defense budget will aid economic recovery in the near term—federal spending on defense is just as much a job-producing stimulus as federal spending on infrastructure. Nor, more importantly, do they believe that cutting defense spending will have more than the most marginal effect on reducing the runaway deficits projected for the coming years. The simple fact is, as my Brookings colleague and former budget czar Alice Rivlin recently observed, the scary projections of future deficits are not “caused by rising defense spending,” and even if one assumes that defense spending continues to increase with the rate of inflation, this is “not what’s driving the future spending.” The engine of our growing debt is entitlements.

So why are the various commissions, including the Rivlin-Domenici commission, as well as members of Congress, calling for defense cuts at all? The answer boils down to one of fairness, and politics. It is not that cutting defense is necessary to save the economy. But if the American people are going to be asked to accept cuts in their domestic entitlements, the assumption runs, they’re going to want to see the pain shared across the board, including by defense. 

This “fair share” argument is at least more sober than phony “cut defense or kill the economy” sensationalism, and it has the appearance of reasonableness. But it is still based on a fallacy. Distributing cuts equally is not an intrinsically good thing. If you wanted to reduce the gas consumption of your gas-guzzling car by 10 percent, you wouldn’t remove 10 percent of your front and rear bumpers so that all parts of the car shared the pain. The same goes for the federal budget. Not all cuts have equal effect on the national well-being. Few would propose cutting spending on airport security, for instance. At a time of elevated risk of terrorist attack, we don’t need to show the American people that airport security is contributing its “fair share” to budget reduction.

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