The defense industry is now promoting a report that says cutting defense spending will lead to more unemployment. A trillion dollars in cuts over a decade, they say, will lead to the loss of one million jobs. Republicans will undoubtedly start using this report as a reason not to cut defense spending.
An economic impact analysis projects more than one million American jobs could be lost as a result of defense budget cuts if the deficit reduction select committee fails to reach agreement on alternative balanced budget solutions and total cuts to defense reach $1 trillion.
Dr. Stephen S. Fuller, Dwight Schar Faculty Chair, University Professor and Director, Center for Regional Analysis at George Mason University and Economic Modeling Specialists Inc. (EMSI) conducted the analysis on behalf of the Aerospace Industries Association. “Our analysis reveals bleak outcomes for both the defense industry and the economy as a whole if the budget sequestration trigger is pulled and $1 trillion is cut from defense,” said Dr. Fuller.
“Dr. Fuller and EMSI’s study shows the dramatic and devastating impact these cuts would have, not only on our industry but on the economy at large,” said AIA President and CEO Marion C. Blakey. “Congress must find budget deficit solutions that don’t sacrifice the jobs of those who supply the American warfighter.” “We cannot add .6 percent to the current 9.1 percent rate of unemployment, it would devastate the economy and the defense industrial base and undermine the national security of our country,” she added.
And this report, while likely exaggerated, is undoubtedly correct. Less spending on defense does reduce employment. But that isn’t really an argument against those cuts. Defense is not a make-work program. The same should be true of infrastructure spending. We shouldn’t be funding useless projects just to create jobs. But there are lots and lots of things we need to build or maintain far more than we need more bombs and tanks. We should start by building a smarter, more robust electrical grid and upgrading our terribly outdated water and sewage systems.