ARMY COMMAND AND GENERAL STAFF COLL FORT LEAVENWORTH KANS
The reduction in United States defense spending for Southeast Asia is expected to create a rise in the number of unemployed in this country. It is estimated that 374,000 persons would be unemployed, resulting from an assumed 20 billion reduction in defense spending, spread over an 18 month period. Therefore, the United States must prepare for a successful transition. This must be well-timed and is essential to maintain a high level of demand. After the initial transition period it should be possible to plan for a moderate federal budget surplus in order to supplement the private savings available for private investment. this study investigates the effect that a decrease in defense spending for Southeast Asia will have on employment and what measures should be taken to offset any decrease in employment brought about by an end to the hostilities. This is accomplished by an evaluation of the sharp increase in United States expenditures for Vietnam and the resultant increase in defense generated employment. Conversely, this is also the employment which is most likely to be affected by a reduction in defense spending.