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Entitlements Crowd Out Defense Spending, and It’s Only Getting Worse

Posted By Mackenzie Eaglen On December 7, 2009 @ 4:28 pm In Economics | Comments Disabled

Last week’s Wall Street Journal [1] called attention to an issue that most policymakers in Washington don’t want to talk about: President Obama and Congress’ ever-growing welfare state will quickly undermine national security and military strength similar to many European countries.

Indeed, declining military strength will limit the choices available to any U.S. President. Yet, providing for the defense of the American people should not be a choice. Rather it is the fundamental responsibility in government, but few would know it these days.

The U.S. government is set to run overwhelming bud­get deficits long into the future, and the principal reason is the growth in entitlement costs [2], not increased defense funding since 9/11.

Since 1970, the historical ratio between defense spending and entitlement spending on Medicare, Medicaid, and Social Security has flipped. In 1970, total defense spending was 8.1 percent of our economy or Gross Domestic Product (GDP) — more than twice the 3.8 percent of GDP spent on the big three entitlement programs.

Today, the core defense program has fallen to 3.9 percent of GDP, while entitlement spending has more than doubled to 9.6 per­cent of GDP. By 2030, the big three entitlements will absorb roughly 81 percent of all federal revenue if taxes are rightly held at historical levels. This crowds out defense and homeland security spending and threatens the historically low-tax, high-growth U.S. economy.

As a nation at war, the U.S. is spending remarkably little on core defense. Congress is currently spending so wildly it will yet again be forced to increase the federal debt limit [3] above its current ceiling of $12.1 trillion. Yet in 2009 defense spending only accounted for 17 percent of total outlays.

Budgeting by definition requires trade-offs, which is why the President and Congress must think carefully about the impact the tsunami of entitlement spending will have on national security.

Co-authored by Steve Keen.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2009/12/07/entitlements-crowd-out-defense-spending-and-it%e2%80%99s-only-getting-worse/

URLs in this post:

[1] Wall Street Journal: http://online.wsj.com/article/SB10001424052748704107104574573711965511326.html

[2] growth in entitlement costs: http://www.heritage.org/Research/Features/BudgetChartbook/Entitlement-Spending-Will-More-Than-Double-by-2050.aspx

[3] increase the federal debt limit: http://www.foundry.org/2009/12/01/shhh%E2%80%A6congress-is-raising-the-debt-limit/

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