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The Military-Industrial Complex
Katherine Newman, photo  by Robin Holland
The Military-Industrial Complex

Spending on private contractors like Blackwater is part of a defense budget that accounts for a major share of the US government's discretionary spending. President Bush's proposed 2008 budget was greeted by the WASHINGTON POST with the headline "Bush's Defense Budget Biggest Since Reagan Era Iraq, Afghanistan Spending Top Vietnam War." The paper went on to crunch the numbers:
President Bush's defense budget request of $481.4 billion — an 11 percent boost over last year — pushes US defense spending to levels not seen since the Reagan-era buildup of the 1980s. In addition, the president is seeking a projected $141.7 billion in emergency supplemental funding for 2008 for the wars in Iraq and Afghanistan and for broader anti-terrorism efforts — bringing the total spent in those arenas since 2001 to $661 billion, eclipsing in real terms the cost of the Vietnam War.*
But there's more to these numbers than just grand totals that make deficit hawks uneasy. Defense spending is unarguably an important element of the US economy. In every state defense or defense-related federal spending accounts for the bulk of federal contract money. In fact, analyses of the health of the US economy often rests on the rate of defense spending. In an October 2, 2007 analysis of the economy THE FINANCIAL TIMES noted: "The defence sector is now enjoying the ninth consecutive year of spending rises. The US defence budget, at $570 billion in 2007, is larger than the military spending of the rest of the world put together." The TIMES noted that defense spending booms have historically run in up to nine-year cycles — but that this time growth shows no sign of slowing: "Investors are unfazed by the example of the past: shares are up more than 25 per cent this year. There are reasons to be sanguine."

It was an ex-soldier who first put forward the notion of a military-industrial complex. In January 1961 President Dwight D. Eisenhower issued a warning about this symbiotic relationship between government defense spending and the economy in his farewell address to the nation:

This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence — economic, political, even spiritual — is felt in every city, every state house, every office of the Federal government....In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. --President Dwight D. Eisenhower's Farewell Address to the Nation
Eisenhower's words of warning undoubtedly hold extra weight, coming from an ex-General who had witnessed World War II defense spending restore a depression economy, and a president who presided over crucial years of the Cold War.


US Budget Breakdown: The White House also provides information on spending by agency and by function. The figures of spending by function reflect the discretionary budget. The figures by agency reflect the total federal outlay. Figures by function reflect interest payments on the national debt. You can also review the Department of Defense's presentation of budget materials. Discretionary spending is the part of the budget over which Congress has control (the numbers exclude entitlements such as Social Security, Veterans Benefits and other mandated programs). Again, 2008 budget numbers do not include the costs of the war in Iraq or peacekeeping and reconstruction efforts.

Published on October 19, 2007

Related Media:
Moyers Clip File: Loose Change
Who is keeping track of the billions we're spending in Iraq? Under the radar news you need to know.

Christian Parenti on Afghanistan
Journalist Christian Parenti, just back from his fourth visit to the forgotten frontline, speaks to Moyers about the growing influence of warlords in government and the resurgence of the Taliban and the drug trade.

References and Reading:
Center for Defense Information (CDI)
The CDI is a non-partisan think tank conducting security-related research on topics such as weapons systems to military expenditure. The Center was founded in 1972 by recently retired, senior US military officers.

Congressional Budget Office
The Congressional Budget Office (CBO) was created in 1974. CBO's mission is to provide Congress with objective, timely, nonpartisan analyses needed for economic and budget decisions and with the information and estimates required for the Congressional budget process.

Department of Defense Inspector General Hotline
The Defense Hotline is designed to enable individuals to report fraud, waste, abuse, and mismanagement in the defense industry. As of late 2004, the Defense Hotline received more than 228,000 calls and letters. The Department of Defense estimates that Hotline investigations have saved or recovered $425 million.

Federal Procurement Data Center
The Federal Procurement Data Center (FPDC)'s Web site keeps track of federal contracts over $25,000. The Executive departments and agencies award over $200 billion annually for goods and services. The site has a function which enables visitors to search by federal agency, product and service, state or contractor.

National Priorities Organization
The National Priorities Project is a not-for-profit advocacy group which focuses on the impacts of federal tax and spending policies at the community level. The group's Web site has several interactive features that propose alternatives to federal defense spending.

Office of Management and Budget
The Office of Management and Budget is the federal entity charged with assisting the President in overseeing the preparation of the federal budget and to supervising its administration in Executive Branch agencies. The OMB evaluates the effectiveness of agency programs, policies, and procedures, assesses competing funding demands among agencies, and sets funding priorities. The homepage of OMB's Web site features a "The Wastebasket," where people can report government waste. The OMB's site provides detailed statistical information on the federal budget.

United States Senate Office of Public Records
This site provides access to filings by all federal lobbyists. You can search by Congressional session and by lobbyist name to find amounts spent.

US Department of Defense
The official site of the Department of Defense provides a wealth of information on defense agencies and programs. The site offers a daily defense press briefing.

The Cold War from CNN
This companion site to the CNN series offers a wealth of historical information and analysis on the Cold War. Highlights include details of Cold War weapons systems and an intriguing debate on where technology would be today without the impetus of the Cold War.

President Eisenhower's Farewell Address
Full text of President Eisenhower's Farewell Address to the nation delivered on January 17, 1961. It was in this speech that Eisenhower coined the term, military-industrial complex.

Audio Version
Listen to President Eisenhower's speech.

Also This Week:

As Blackwater CEO Erik Prince makes the rounds defending his company, from Congress to the talk shows, journalist and Blackwater expert Jeremy Scahill helps us separate the spin from the reality.
>Blackwater's Beginnings

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