Two months ago, Cato published a study by economist Benjamin Zycher, a senior fellow at the Pacific Research Institute, that showed that military spending contributes very little to GDP growth, and concludes that cuts would have very little long-term impact on GDP. On the contrary, Zycher estimates that cuts on the order of $100 billion a year would reduce costs in the wider economy by $135 billion per year. I wrote about that study when it was published here.
It's telling that the most quotable line from Mitt Romney's foreign policy speech Monday is a reheated zinger from Rudy Giuliani's 2008 Republican National Convention speech: "Hope is not a strategy."
Cato has just released a new video, titled “The Truth about Sequestration,” that tells the real story about sequestration, the automatic budget cuts required by the Budget Control Act.
On Sunday, Defense News published a good article by Kate Brannen that looks into Mitt Romney’s plans for military spending. This is not the first examination of Romney’s lofty campaign promise to spend at least four percent of GDP on the Pentagon’s base budget. Since October 2011, when I first crunched the numbers on his plan, others have followed with their own estimates.
The changes announced in the Pentagon’s new budget guidance are, from my perspective, mostly good news, but woefully insufficient. They show how even limited austerity encourages prioritization among weapons systems that suddenly have to compete. A few more budgets like this and we’ll be getting somewhere.