Defense Spending and the Economy
CONGRESSIONAL BUDGET OFFICE (U S CONGRESS) WASHINGTON DC
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Over the last several years, the United States has rapidly increased its defense spending, and the Administration proposes to continue that buildup in fiscal years 1984-1988. If the Administrations plans are carried out, budget authority for national defense would rise from 146 billion in 1980 to 433 billion in 1988. After adjustment for inflation, that represents real growth of 88 percent, or an average of about 8.2 percent a year. Outlays would grow from 136 billion in 1980 to 386 billion in 1988, representing real growth of 75 percent, or about 7.3 percent a year. The contemplated increases would raise defense outlays as a share of the Gross National Product GNP from 5.2 percent in 1980 to 7.7 percent in 1988--the share they held in the early 1970s. The proposed buildup emphasizes investment, which includes procurement, research and development, and military construction. Budget authority for these investment accounts would grow from 51 billion in 1980 to 219 billion in 1988. This constitutes real growth of 169 percent, compared to an 88 percent real increase in the budget as a whole during this period. Because of the emphasis on investment, the defense buildup could have more effect on the goods-producing sectors of the economy than the overall growth rate suggests.
- Economics and Cost Analysis
- Government and Political Science
- Military Forces and Organizations