The Pentagon’s Latest Misleading Argument To Protect Its Budget: Cuts Will Lead To Higher Unemployment

Defense Secretary Leon Panetta has been trying to do everything he can to convince the deficit reduction super committee to spare military spending when it decides how to arrive at $1.5 trillion in cuts. He began last month by using fearmongering techniques, claiming that $1 trillion in military spending cuts over the next decade would be “devastating” and “dangerous.” However, Panetta has yet to offer any specifics on these claims (in fact, experts have identified how the U.S. can cut $1 trillion and still maintain military superiority). Panetta’s allies soon piled on, defending the status quo spending with similar fearmongering and false and misleading arguments.

Now, the Defense Department is turning to another disingenuous argument: jobs. Reuters reports:

Defense Secretary Leon Panetta is warning members of Congress that threatened defense cuts in the order of $1 trillion over the next decade would add 1 percentage point to the U.S. unemployment rate. […]

“What we’re talking about there is in the neighborhood of about a trillion dollars of defense cuts,” Pentagon spokesman George Little told reporters flying with Panetta to Washington after talks with Australia in San Francisco.


“We believe that would result in job cuts that would add potentially 1 (percentage point) to the national unemployment rate.”

But the reality is that, diverting federal dollars to defense and other military spending actually results in a net job-loss. The War Costs project points to a 2009 study from economics professors at the University of Massachusetts to make that case. And this week, one of the study’s co-authors noted that “the relevant measure is how many jobs [military spending] creates per dollar of spending relative to various alternative spending targets,” he said, adding:

“By this standard, military spending does very poorly. It creates about 12,000 jobs per $1 billion in spending, compared with 17,000 for the green economy, 20,000 for health care and 29,000 for education. This means that when we spend $1 billion on the military rather than green investments, health care or education we are forfeiting between 5,000 and 17,000 jobs. Creating more job opportunities in this country therefore means moving money out of the military and into socially beneficial domestic spending.”

Center for Economic and Policy Research co-director Dean Baker said that economic modeling firm Global Insight came to a similar conclusion in a 2009 study. “Global Insight’s model projected that after 20 years the economy would be about 0.6 percentage points smaller as a result of the additional defense spending,” Baker said, “Slower growth would imply a loss of almost 700,000 jobs compared to a situation in which defense spending had not been increased.”