Captives of the Cold War Economy: The Struggle for Defense Conversion in American Communities

By John J. Accordino | Go to book overview

1
The National Context:
Defense Spending and Conversion
Policy in the 1990s

THE COSTS OF THE COLD WAR

The fall of the Berlin Wall in 1989, symbolizing the end of the Cold War, spurted optimism that the world might now be spared a nuclear winter. It also prompted hopes that the massive sums that had been spent on defense could now be directed toward other pressing needs: Improving the nation's physical infrastructure and public education, cleaning up the environment and developing alternative energy sources, supplying housing, mass transit and health care, and improving industrial productivity. Although the United States could legitimately claim to have won the Cold War, the cost of victory had been staggering. Between 1948 and 1991 the United States had spent $13.1 trillion ( 1996 dollars) on the military, an average of $298.5 billion per year. Even with the Korean War and Vietnam War years excluded, average annual military spending for the period stood at $285.4 billion ( 1996 dollars).1 This sum equals about 60 percent of total annual discretionary spending and about 5 percent of the nation's annual gross domestic product (GDP).2

Employment in defense industries and in the U.S. Department of Defense (both military and civilian) occupied 6 million persons in 1991, or 5 percent of the nation's 119 million workers.3 The total number of jobs that depended on defense spending was even larger, however, because money flowing into a community through a base or a defense contractor is then spent on ancillary services, supplies, retail, and other activities. On average, a multiplier of 2, whereby one military or defense contractor job supports an additional service job in the community, is a reasonable estimate. Thus, 12 million persons, or roughly 10 percent of the U.S. workforce, were directly or indirectly dependent upon defense employment in 1991.

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