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Wed Aug 29, 2012, 01:18 PM

Romney’s Defense-Budget Growth Tops Cold War Pace: BGOV Insight [View all]

Governor Mitt Romney’s national security policies reflect the Oliver-Twistian mindset of the Republican establishment on defense issues. They want some more. How Romney obliges that impulse illustrates the dilemma of trying to satisfy a military-industrial complex whose business models and profit margins are based on fixed diets.

Candidate Romney has set a goal of a base Pentagon budget that’s equal to 4 percent of the nation’s gross domestic product. That’s about where defense spending will be in the coming year, assuming a decline in spending for the war in Afghanistan. Depending on how the economy behaves during the next four to eight years, a President Romney’s 4 percent solution may prove welcome to the party’s traditional defense hawks yet face real pushback from deficit hawks.

And if it should get to the point of working out the details, some of the defense hawks will be screaming for mercy, too.

Though the economy is struggling today, most forecasts from government and private-sector economists predict healthy GDP growth from 2014 into the next decade. Tying defense spending to the GDP would result in rapid growth that stretches well above historic averages and even above peak spending during the Cold War, adjusted for inflation.

In 1986, the peak year for the Pentagon under President Ronald Reagan, defense spending represented 6 percent of GDP. That was up from the 4.9 percent of GDP spent on defense in 1980, near the end of the Jimmy Carter administration. Many, including Reagan, deemed that too low.

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http://www.bloomberg.com/news/print/2012-08-29/romney-s-defense-budget-growth-tops-cold-war-pace-bgov-insight.html

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