02/08/2013 03:23 pm ET Updated Apr 10, 2013

The Biggest Big Government Spending of All

Amidst the hand-wringing and teeth-gnashing over the so-called fiscal cliff, many have failed to notice the upside of all these machinations. First, who would have predicted that the obscure SAT word "sequestration" would come into such general use, and that otherwise semi-articulate news broadcasters would use it so regularly and sound so erudite?

Even more importantly, the guaranteed "catastrophic" cuts to the Pentagon that would have resulted from falling off the cliff may have, inadvertently and ironically, started a conversation about just how big the defense budget ought to be in the first place.

To say that the defense budget is enormous is to state the obvious. The Pentagon is now spending well north of half-a-trillion dollars each year. (Actually, it is very hard to know just how much we spend each year on the military. Some DOD money can be found in other budgets, like over at the Department of Energy; some money isn't counted as military spending, though it is, and some budgets are simply classified). Which makes $250 billion in cuts over ten years seem not so draconian after all.

Beyond its sheer almost unimaginable size, that 12-digit figure represents a remarkable continuity. Since the end of World War II, or more properly since the start of the Cold War, Pentagon spending has amounted to roughly half of all federal discretionary spending each year. Some years it's been a little less than 50 percent; some years a little more.

Over sixty-odd years administrations have come and gone, Democrats have been replaced by Republicans and vice versa, and the Pentagon budget continued to grow. The result is that we are now spending as much on the military in constant dollars as we did in 1945, just about as much as the rest of the world combined, well over $2000 for every man, woman and child in the country. Say what you will about the bitter political divisions in American life, but the defense budget has represented multi-billion dollar bi-partisanship for decades.

The Cold War built the initial architecture of our vast military spending. That finished 20 years ago, of course, but in fact the military rationale for those big budgets had been eclipsed long before. Domestic economics rather than foreign threats have driven Pentagon spending since at least 1961, when President Dwight Eisenhower coined the phrase "military-industrial complex" and warned us all against it.

In other words, defense spending is the biggest "big government" program of them all. Tens of thousands of jobs in dozens of regions across the country depend on Pentagon money, which is really why it has been so difficult to shrink those budgets. Never mind what conservative "small government" Congresspeople might say, they all want a piece of that pork, and they want an even bigger slice of it next year.

For 30 years now, enormous defense spending has made a lie of the conservative agenda to shrink government and balance budgets, though those conservatives don't quite seem to realize it. When David Stockman, Ronald Reagan's first budget director, explained to him that he couldn't balance the budget by slashing taxes and embarking on massive spending on the military, Reagan told him "Defense is not a budget issue," and 30 years later Republicans have still not improved their math skills. (Remember: the national debt grew 180 percent during the Reagan years).

It's worse than that. Not only is defense money "big government" Keynesian spending of the sort conservatives are supposed to oppose, but it isn't very effective Keynesianism. As economists like Seymour Melman and others have demonstrated, money spent on the military does not have nearly the same ripple through the economy that money spent on transportation or education does. Spend a billion dollars building a road and people use it to move goods and services around. Spend a billion on a nuclear warhead and it sits in the ground somewhere in South Dakota. Conservative politicians may hate Keynesian spending but they love "military Keynesianism."

And on top of that, many of those big-ticket military contracts that support General Dynamics, Raytheon and the rest don't even go out for real competitive bidding. They are simply awarded in a system that looks a lot like the command-control economy of the old Soviet Union, except that Raytheon makes huge profits on this public expense. My friends and I used to joke in the 1980s that the Pentagon was the world's second largest socialist economy. It still is.

Recently, however, a growing chorus of voices have begun to question the received wisdom of the last several generations. Academics as varied as Andrew Bacevich and Paul Koistinen have published important work detailing just how the military-industrial complex grew to the size and permanence it enjoys today, and both raise important questions about what must be done to curb it. Jill Lepore has summarized some of this work in an essay in a recent issue of the New Yorker.

So in the midst of our slow-motion train-wreck of a budget debate maybe the Pentagon budget is a place where we can still find some bi-partisan cooperation, only this time with a goal of reining in the runaway Pentagon. Conservatives looking to cut spending by cutting waste and imposing budgetary "discipline" need look no further; liberals who want money for domestic infrastructure investments can find that money across the river in Arlington without having to add to deficits.

I know. This would require courage and common sense. But the fact remains: We no longer need, nor can we sustain the gargantuan military budgets of previous decades. What's more, we never did nor could.

Steven Conn is the editor of "To Promote the General Welfare: The Case for Big Government" from Oxford University Press and a professor of history at Ohio State University.

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