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BOHANON & CUROTT: Spending on defense is small part of GDP

April 13, 2018

Economic Analysis by Cecil Bohanon & Nick CurottAt the time of this writing, we do not know our government’s response to the alleged gassing of Syrian civilians by the Assad regime. But independent of what our response is, the latest Syrian crisis raises some questions: How big of a role do we Americans want to play in the world? Shall we maintain or expand U.S. military presence in the world, or shall we reduce it outside our borders?

Our foreign-policy choices have big implications for defense spending, which is a big part of the federal budget. And federal spending has an impact on the economy.

U.S. defense spending was $744 billion in 2017, or about 3.8 percent of U.S. gross domestic product. By historical standards, this is low: Since World War II, defense spending has averaged 7.6 percent of GDP. The average declines to 4.8 percent in the years since 1990, when the Cold War is said to have ended. Yes, both the Cold War and the Iraq wars were costly. Fighting foreign adversaries is never cheap.

Syria is a human tragedy. The country is decimated, over 400,000 have died, and some 11 million—around half the population—have been displaced from their homes. But Americans are hesitant to become more involved.

Before the most recent gas attacks, a Rasmussen poll asked Americans whether “the USA should become more involved in Syria?” Only 31 percent said yes, while 45 percent said no, and 24 percent were undecided. It’s interesting to note that there is neither a partisan nor ideological divide. Conservatives split 44 percent to 34 percent against increased U.S involvement, similar to the 40 percent to 33 percent split against more involvement among liberal respondents. Moderates are even more “hands-off,” with 53 percent opposed to increased involvement and only 26 percent for it.

Our bet is that the civilian gassing will result in a quick American strike near Assad’s residence, but it will end at that. Americans simply do not have the stomach for protracted involvement in another conflict. The Syrian civil war is a disaster, but it is not our disaster. Or perhaps Americans are skeptical that our involvement will do much to improve the situation: The track records in Afghanistan and Iraq are not encouraging.

Although recent budget deliberation resulted in plans to increase defense spending for the next couple of years, at some point budget pressure will surely put defense spending on the chopping block, regardless of which party occupies the White House or controls Congress. For better or worse.•

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Bohanon and Curott are professors of economics at Ball State University. Send comments to ibjedit@ibj.com.

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