How More Military Spend Could Save U.S. Money

Posted September 12, 2014 at 5:10am

Diana Furchtgott-Roth, former chief economist of the U.S. Department of Labor who now directs Economics21 at the Manhattan Institute, writes in MarketWatch : “I was in a meeting of the National Economic Council staff in the West Wing of the White House on Sept. 11, 2001, when the planes hit the World Trade Center. Not only did terrorists destroy the twin towers, damage the Pentagon and kill 3,000 people, but they also forced the U.S. to spend additional billions on defense, swelling the deficit.”  

“In 2001, the federal budget had a $128 billion surplus, about 1% of gross domestic product. The National Economic Council could talk about how to use the surplus to benefit the economy, such as putting Social Security on a path to financial solvency, or lowering taxes. But a recession that began in March 2001 was exacerbated by the 9/11 attacks.”  

“Fast forward to 2014, when our nation’s debt is $18 trillion. Social Security and Medicare consume 40 cents of every dollar spent by the federal government, a proportion expected only to increase in the years ahead. Our fiscal situation looks dire now, but it will be worse if another 9/11 comes along and we must increase military spending to defend ourselves.”