The 50th anniversary of one of the best predictions ever made.

50 years ago today, President Eisenhower’s farewell address laid out the (then) current landscape of US military power, 7 years after the Korean War, in which the US had a huge standing army, permanent and large corporations dedicated to making armaments and the beginnings of powerful lobbying by both of those interests to protect their ever growing share of the national treasure. 50 years later, the “military industrial complex” consumes about 20% of our budget, around $600 billion dollars per year (over $700 billion including all military retirement and other benefits). This amount is roughly equal to the annual cost of the Social Security program, also equal to the cost of Medicare and Medicaid, it is about 40% larger than the cost of all other safety net programs combined.

CBPP breakdown of the federal budget fiscal 2010

Furthermore, current military spending is equal, in inflation-adjusted dollars to the amount spent at the HEIGHT of cold war military spending, circa 1986. At least then, there was a somewhat plausible threat halfway across the world. Why today do we have 11 nuclear aircraft carriers, 58 nuclear submarines, a navy 20 times the size of the rest of the world combined, joint strike fighters, cluster munitions, drones, and a standing army of 1.4 million? Who do we have to fight? Makeshift militias of irregular fighters using virtually nothing more than decades old Kalashnikov rifles and improvised bombs.

Yet the expertise of defense contractors in spreading jobs and campaign cash (paid for by the taxpayers) all over the US all but guarantees that only the most grossly embarrassing procurements will ever be stopped by common sense or fiscal rectitude.

It’s remarkable how well Eisenhower, a former 5 star general, called it in 1960. This was not an obvious time to warn of overspending on defense, what with all of the Cold War hysteria in full swing, a few years before the Cuban Missile Crisis, the “missile gap” and during the honeymoon phase of the domino theory.

If we only spent TWICE as much as Russia, China and Iran combined, we could cut our “defense” budget in half. Instead, we outspend all the other countries in NATO 2 to 1, all of whom would be considered “pure” allies by any reasonable measure. Why?

Spending has a logic all its own, especially when there are hundreds of thousands of well-connected and coordinated players around the nation pushing to maximize the growth of spending on their special needs all the time. See “US health care” for another place we outspend the rest of the world by a large margin with very questionable results. (You could throw college spending in there too, will finish that line of thought soon.)

On the ideological spectrum, this Republican President who attacked defense spending and presided over both the interstate highway system and the most progressive era of taxation and income inequality in the history of the nation, would clock in somewhere well to the left of Obama in terms of fiscal priorities and well ahead of him in terms of courage to take on entrenched interests. I like Ike.

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About theunlikelyeconomist

theunlikelyeconomist is in the midst of the long slog to attain a PhD in economics.
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