January 17 was the 50th anniversary of President Dwight Eisenhower’s farewell address. The speech is most commonly remembered for President Eisenhower’s warning about the “unwarranted influence” of the “military-industrial complex,” but often left out of the story is Ike’s warning about profligate federal spending as well: “We cannot mortgage the material assets of our grandchildren without risking the loss also of their political and spiritual heritage. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow.” Ike went on to call for “balance in and among national programs” including “balance between the clearly necessary and the comfortably desirable.”
The balance of today’s federal budget looks much different than it did during Ike’s time. When Ike spoke, the U.S. government spent 10 percent of or gross domestic product (GDP) on national defense, while Medicare and Medicaid did not even exist. Today, we spend only 4.9 percent of our GDP on defense and 9.9 percent on our entitlement programs (which include Medicare, Medicaid, and Social Security). Clearly, defense spending is not the cause of our nation’s debt problem. Looking forward, the imbalance only gets worse: Defense spending is set to fall to 3.5 percent of GDP by 2015 while spending on entitlement programs is set to consume 100 percent of tax revenue by 2052. The “balance” of our spending priorities has dramatically shifted—and not toward one that favors “the clearly necessary” over the “comfortably desirable.”
This week, The Heritage Foundation and The Wall Street Journal released the 2011 Index of Economic Freedom, and the news was not good. For the second year in a row, the United States became less economically free as the Obama Administration jacked up government spending through economic stimulus, undermined private property with more bailouts, failed to pursue free trade agreements, and slowed job growth with burdensome new Obamacare regulations. Our deficit in 2010 was actually higher as a percentage of GDP than the deficits of Greece or Spain. We are headed down a European welfare state path. And that path will not allow the U.S. to continue to play its leading role as the world’s most powerful democracy. The Heritage Foundation’s Theodore Bromund explains:
Historically, American international leadership after World War II was predicated on the correct belief that political and economic freedom and progress were interdependent. The U.S. decided to move away from protectionism, and encourage other countries to do the same, to prevent another Great Depression and the accompanying rise of totalitarianism. But now, instead of the U.S. driving the world’s move towards economic freedom, the U.S. is holding the rest of the world back. This is a rejection of the U.S.’s successful, bipartisan post-war grand strategy. The United States cannot be a world leader if it has a stagnant economy.
Our military leaders also recognize federal spending as a threat to national security. This past August, Joint Chiefs of Staff Chairman Admiral Michael Mullen told CNN that “the most significant threat to our national security is our debt.” This is not to say that our defense budget is perfect. Far from it. Heritage Foundation defense policy analysts Mackenzie Eaglen and Julia Pollack have identified defense spending reforms that could save taxpayers more than $70 billion. But it is vitally important that these savings are plugged back in to preserving our economic freedom. Our military equipment and forces are wearing out. Our tactical aircraft have an average age of 20 years, bombers nearly 30, and tankers about 45. The bipartisan blue-ribbon panel led by William J. Perry, former Secretary of Defense under President Bill Clinton, and Stephen J. Hadley, former National Security Adviser to President George W. Bush, identified military modernization as the key to doing more on a strained national security budget.
We cannot adequately protect ourselves without a modernized military. A modernized military depends on a strong U.S. economy. That is why economic freedom is not just a pocketbook issue: It is fundamental to American security.