Policy Analysis No. 110

More Defense Spending for Smaller Forces: What Hath DoD Wrought?

By William A. Niskanen
July 29, 1988

Executive Summary

U.S. defense spending (adjusted for general inflation) is now about 60 percent higher than it was in 1978 (and about 20 percent higher than it was in 1968, the peak spending year during the Vietnam War).(1) The buildup from 1979 to 1987 was the largest and longest peacetime increase in real defense spending in U.S. history. At the current real spending level, however, several important elements of the nation’s military force are projected to be smaller or more vulnerable in 1990 than they were in 1978.

This paper examines the characteristics of the defense buildup and addresses the following questions:

— What were the origins of the buildup?

— How was the money spent?

— How did the buildup affect U.S. military capability as measured by changes in force structure, the number and quality of modern weapons, the quality of military personnel, and force readiness and sustainability?

— Was the buildup affordable?

— To what extent did the buildup resolve the perceived national security problems at the beginning of the period?

— Was the buildup worthwhile?

— What effects will the buildup have on the U.S. defense budget and program in the near future?

— What lessons of the buildup period should guide U.S. defense policy during the next administration?

Some of those questions are difficult, and there will continue to be disagreement over the answers, even among defense analysts with access to classified data. A better understanding of the issues by the broader community of public officials and voters, however, is necessary to rebuild a consensus on U.S. defense policy. This paper is intended to serve that objective.

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William A. Niskanen is chairman of the Cato Institute and was a defense analyst for 13 years. He is the author of Reaganomics: An Insider’s Account of the Policies and the People (Oxford University Press, 1988).