Defense's drag on the economy
The current economic deterioration of the United States is a direct consequence of this nation's immense military budget. Before we can act upon Federal Reserve chairman Paul Volcker's warning that the ''twin deficits'' in budget and trade ''pose a clear and present danger'' to US economic survival, there will have to be a drastic reduction in Pentagon spending. If this reduction is accomplished by eliminating the most desta-bilizing weapon systems now being funded, especially the MX and the ''Star Wars'' antiballistic missile program, the US will also become safer from Soviet attack.
National security means more than the capacity for projecting destructiveness. The Reagan administration's frenzied search for expanding this capacity has only succeeded in making the Soviets more fearful. And by allocating scarce capital and human resources to arms competition, the administration has hastened the erosion of our country's economic vitality. Our foreign trade position, which fell into its deepest deficit in history last year , now resembles that of an underdeveloped country.
Largely because of its self-defeating commitment to military spending, the US now exports raw materials in abundance and imports more manufactured goods than it sells abroad. Because of mistaken dedication to ''rearmament,'' we have now created a distinct government-dependent civilian sector that is inherently prone to inflation and waste - conditions resulting from rapid obsolescence, frequent product change, unstable markets, large bureaucracies beyond public control, cost-plus pricing, and retarded management efficiency.
Military expenditures are at profound cost to private capital use. A worsening drain on productive investment, these expenditures - as they have been fashioned by the Reagan administration - make impossible any sustained revitalization of the American industrial plant. By accepting an acceleration of a massive transfer of capital away from civilian industry to the military sector , we turn our backs on the industries upon which we depend. Unless this trend is reversed, our domestic and international competitive performance will wane even further, and the damage to our steel, automobile, textile, chemical, and other industries will become irreversible.
Instead of stimulating productivity and competitiveness, President Reagan's commitment to arms will bring about severe patterns of recession. The victims of such economic dislocation will include those comfortable segments of farmers, workers, professionals, and investors who refuse to confront the essential logic of survival in a tightening national and global marketplace.
To understand this logic, we need to recognize that military spending makes up a large fraction of a fiscal 1985 budget that will be $208 billion in the red , a deficit that will drive up interest rates and transform the recovery into long-term or perhaps permanent recession.
Military spending also generates buying power without producing an equivalent supply of useful goods. The excess of disposable income over available supply builds up a steady pressure on prices. The problem is aggravated by the fact that military demand also adds directly to the pressure on prices for specific goods, especially when military purchases are directed to those commodities and labor skills in shortest supply.
While an enormous share of the budget pie goes to nuclear weapons, the Reagan administration ignores essential research that could develop alternate sources of energy, increased food production, better housing and improved public health. These distorted priorities perpetually limit innovation and investment, occasioning low growth, diminishing competitiveness, and the kind of trade deficit that we experienced for 1983 - $60.6 billion - 67 percent more than 1982 's record of $36.4 billion.
Spending on military budgets is a great burden on the economy, not a stimulant. Where it is authorized to support nuclear weapon systems that provoke the Soviet Union without adding to our capacity for ''assured destruction,'' this spending also makes war with the Soviet Union more likely.
Where has the nuclear arms race gotten us? In what must surely be the single greatest irony in the history of our species, our debilitating sacrifice of treasure has failed to ensure even the most elementary forms of security from enemy attack. Today, after the expenditure of trillions of dollars on armaments that has brought the economy to near calamity, we are entirely indefensible.
