The Political Economy of Military Spending in the United States

By Alex Mintz | Go to book overview

CHAPTER 9

‘Guns’ vs ‘Butter’: A Disaggregated Analysis

Alex Mintz

Most people believe there is a tradeoff between spending on defense and spending on welfare (Russett 1982), but, as a number of scholars (e.g. Clayton 1976; Domke et al. 1983; Russett 1982) have shown, 1 the existence of such a tradeoff is difficult to establish empirically. Prior analysis has centered on tradeoffs between total defense spending and specific kinds of welfare spending (e.g. health, education, housing). I examine tradeoffs between welfare spending and specific kinds of defense expenditures.

Congress appropriates funds to the Department of Defense (DoD) by budgetary component. The major DoD components are military personnel, military procurement, operation and maintenance (O&M), and research and development (R&D). These components typically account for 92-97 percent of the defense budget. Appropriations for military personnel finance ‘the personnel costs of the active duty forces of the United States and the future retirement benefits of the current active forces’ (US Office of Management and Budget Budget of the US Government 1987: IG1). These appropriations roughly index armed forces strength and account for about one-third of the defense budget. Procurement expenditures finance the acquisition of military equipment, weapons, and spare parts and the modification of existing equipment. Military procurement spending typically accounts for more than a quarter of the Department of Defense budget. Operation and maintenance appropriations finance the cost of repair and maintenance of DoD plant and equipment, fuel and supply costs, and remuneration of DoD civilian employees. Operation and maintenance expenditures account for about onequarter of the budget. Research and development expenditures finance the development of strategic weapons systems, tactical programs, intelligence and communication systems, and defense-oriented research. This subcategory accounts for almost 10 percent of the budget. 2

DoD data (1978; 1988) show that research and development expenditures were always the smallest of all major defense spending subcategories.

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