In what Matt Yglesias called “a move that I think you can only interpret as a testing of the waters for a presidential run,” Rep. Paul Ryan (R-WI) delivered a foreign policy speech last night to the Alexander Hamilton Society in Washington, DC. Seeing that he is the House Budget Committee chairman, Ryan started off his speech by noting that America’s debt is a national security problem. Interestingly though, the Wisconsin lawmaker specifically excluded military spending as a source of this predicament:
Our fiscal crisis is above all a spending crisis that is being driven by the growth of our major entitlement programs: Social Security, Medicare, and Medicaid. In 1970, these programs consumed about 20 percent of the budget. Today that number has grown to over 40 percent.
Over the same period, defense spending has shrunk as a share of the federal budget from about 39 percent to just under 16 percent — even as we conduct an ambitious global war on terrorism. The fact is, defense consumes a smaller share of the national economy today than it did throughout the Cold War.
If we continue on our current path, the rapid rise of health care costs will crowd out all areas of the budget, including defense.
First, the percentage of what the U.S. government spends on what over time has nothing to do with the curent debt and deficit. The reason defense spending has decreased as a percentage of the budget is not because the U.S. is spending less on defense, it’s because national priorities have shifted over time.
Military spending actually makes up 20 percent of the federal budget — not 16 as Ryan said — and it comprises 50 percent of discretionary spending. But the over all point is that just because military spending has decreased as a percentage of the federal budget doesn’t mean much. In fact, military spending has increased, significantly, since 1970. Total defense spending in real dollars is now higher than at any time since World War II, and DOD’s baseline budget nearly doubled in the last 10 years.
Moreover, Ryan said the “fiscal crisis” is driven by entitlement programs like Social Security. Yet Social Security does not contribute to the debt and deficit. It is a self-sustaining program.
Paul Ryan is right that the nation’s debt is a national security problem. Unfortunately, he doesn’t seem understand the economics behind it.