Summary of the Economic Effects of Reduced Defense Spending
Abstract
During the last few years, and particularly the last six months, astonishing political changes abroad have occurred that eventually could greatly reduce the threats to the national security of the United States. For the past four decades, threats to U.S. security have come chiefly from the Soviet Union and its allies in the Warsaw Pact. Today, many of the Eastern European nations that are part of the Warsaw Pact have begun moving toward democratic governments, which raises questions about how willing these countries would be to join the Soviet Union in any future attack on NATO countries. The Soviet Union itself seems much more concerned with internal problems and reforms than in the past, and thus appears less likely to embark on foreign military adventures. At the same time, the United States and the Soviet Union have made significant progress toward the Strategic Arms Reduction Talks (START) treaty reducing strategic nuclear weapons. NATO countries have also made progress in negotiating a treaty with the Warsaw Pact that would limit conventional forces in Europe (CFE). NATO's proposed version of this CFE treaty-which in many cases matches proposals the Warsaw Pact has already made-would reduce Pact weapons many times more than what would be required of NATO. These favorable security developments have raised the prospect of large cuts in the U.S. defense budget, which some have labeled the "peace dividend." While almost everyone favors reallocating resources that no longer need to be spent on defense, concerns have been raised about problems of economic dislocation and management that could occur as the country makes the transition to lower defense budgets.
Document Details
- Document Type
- Technical Report
- Publication Date
- Mar 01, 1990
- Accession Number
- ADA593560
Entities
People
- G. W. Glass
- R. W. Thomas
- Ralph E. Smith
- Richard L. Fernandez
- Robert A. Dennis
Organizations
- Congressional Budget Office