It has become a Washington commonplace that the federal government’s fiscal problems are increasingly becoming a strategic problem for the United States. “The most significant threat to our national security is our debt,” says Adm. Mike Mullen, chairman of the Joint Chiefs of Staff. The budget proposals advanced by Representative Paul Ryan, chairman of the House Budget Committee, echo this truth. Ryan’s resolution, “The Path to Prosperity,” argues that “on its current fiscal path, the United States will be unable to afford its role as an economic and military superpower.”
This is an arithmetic truth, but not a strategy.
Not to dismiss the arithmetic, of course: Our “current path” is fiscally unsustainable. If federal revenue is held at today’s levels, entitlement spending will eat up every federal tax dollar by about 2050. Already, the increase in “mandatory” spending—entitlements plus interest payments on the national debt—is changing what our government does and is able to do. Here’s a 50-year snapshot of the shift: In 1962, John Kennedy’s administration spent 9.3 percent of American gross domestic product on national defense, 6.1 percent on these mandatory categories. Mandatory spending surged past defense spending under Richard Nixon. When the Berlin Wall came down in 1989, mandatory spending was double defense spending, 12 percent to 5.8 percent of gross domestic product. On 9/11, the ratio was nearly three to one: Defense was 3.0 percent of GDP, mandatory 11.9 percent. Mandatory spending continues to rise, consuming 15.1 percent of the economy today and moving steadily upward, while the defense burden will slip to the post–World War II low of 3 percent at the end of an eight-year Obama term in office.