Defense spending and GDP

Another great article from Tigerhawk:

The Wall Street Journal's front page this morning features an interesting article (sub. req.), "How War's Expense Didn't Strain Economy." The article focuses on economic considerations and fund flows, but the heart of the matter is this: The wars of the last five years have been very inexpensive as a proportion of our national income, which is the only measurement that matters. As the graph at right makes clear, the twin wars of Afghanistan and Iraq have pushed the share of national income going to defense to around two-thirds of the level that prevailed when the Berlin Wall came down in 1989. In fact, we're still spending less than at the trough of Jimmy Carter's post-Vietnam defunding of national defense.

It is incredible that the ridiculous argument that these wars are fiscally unsustainable has worked its way into the national dialogue. I had dinner with a well-informed and (but?) fairly lefty cousin a couple of weeks ago, and she cited the huge cost of the war among her various reasons for opposing it. I made the (to me) obvious point that defense spending was actually still very low by post-war standards and a fraction of the level that prevailed even in the 1980s. Her response: Why doesn't anybody know that? Well, perhaps NPR doesn't dwell on that sort of thing. The New York Times certainly doesn't.

The persistent claim from the left that we cannot "afford" these wars may or may not be true in a larger sense -- the "affordability" of American casualties or lost "prestige" among transnational progressives is obviously a matter of weighing one value against another -- but it is patently false as a matter of fiscal policy. We know we can afford to spend 4% of GDP on defense and still grow the economy more than 3% a year.