News Clips: End of Cold War: U.S. Strategy(1990)

Foreign Policy News Clips: Institute of International Studies, University of California, Berkeley

Foreign Policy News Clips: 1979-1990, edited by Harry Kreisler

1/19/90: The End of the Cold War and the Search for a U.S. Strategy

V. Military Budgets and Peace Dividends

"The Pentagon is about to enter a painful new era, the era of Gramm-Rudman-Gorbachev."

Lionel Barber, Financial Times,12/11/89 p. 14

"Throughout the 20th century military spending has played a pivotal role in jump-starting new technologies that went on to become crucial to the civilian economy. The United States, in particular, since World War II has evolved a system in which military purchases and research finds are key to many of the advanced industries that determine its overall competitive standing in the world.

"Now, with large cuts in the Defense Department's $300 billion budget seemingly increasingly likely due to the deficit pressures and the decline in world tensions, analysts in industry and government are starting to wonder what effect this could have on American technological prowess. If orders for war planes decline, will the aerospace industry lose its edge in the manufacturing of civilian planes? If funding for computer research drops off, will companies making commercial systems see their economies of scale drop?"

John Burgess, Washington Post,12/1/89, p. F1

"If Mikhail Gorbechev can bring down the Berlin Wall, maybe he can solve the U.S. savings shortages, too.

"After all, the overall U.S. savings rate is down for two reasons. Americans don't save as much as they used to. And the federal deficit absorbs much of what individuals do save.

"The deficit connection is straight-forward. With perestroika penetrating thick walls at the Pentagon, the Defense Department is talking seriously about spending cuts far greater than any whispered in the Reagan years. This already famous 'peace dividend' could amount to $40 billion a year by the early 1990's. That won't eliminate the deficit, which exceeded $150 billion last year, but it could be a good-sized down payment. A few economists even argue that the close of the Cold War could prompt people to save more."

David Wessel, Wall Street Journal,11/27/89, p. 1

"The system does not in fact block cuts: the defense budget has reduced some by 15 per cent in real terms from its peak, under pressure of the Gramm-Rudman process. It does so, however, at a heavy real cost. Because Congress is unable to face the hard decision to bring programs to an end, it tends to trim them; this simply means the huge research and tooling costs involved in each new system are loaded onto fewer weapons, and unit costs escalate.

Anthony Harris, Financial Times,11/13/89, p. 23

"Rather than using this new Soviet revolution as an occasion for declaring victory in our ideological war, we should see it as a challenge to our own society. If a closed, reactionary society like the U. S.S. R. can confront its shortcoming and recast itself in a more viable form, can't a free and vibrant society like America do so as well?"

Andrew B. Schmookler, Baltimore Sun,12/13/89, p. A14

"When we added all this up [the projected federal outlays], we found that there was no [peace] dividend. We reported this at a meeting with President Nixon and others at the president's California office. Afterward, Daniel Patrick Moynihan briefed the press and told them that 'the Vietnam dividend is as evanescent as the clouds over San Clemente.' Perhaps because of Mr. Monyihan's poetic expression, that became national news. "

Hervert Stein, Wall Street Journal, 12/13/89, p. A14

"Secretary of Defense Dick Cheney is preparing significant cuts in defense budgets through 1994. Although such cuts are usually feared as an economic nightmare, creating a national recession and leaving local depressions in their wake, the transition may turn out to be easier than expected and could result in economic opportunity -- if properly anticipated and prepared for. "

Gordon Adams, New York Times,12/4/89, p. A23.

"Spending cuts being contemplated by the Pentagon for the 1990's could bring profound changes in the weapons business.

"The cuts could reshape an industry in which the Pentagon and Congress have historically kept open certain weapons factories and laboratories even when they are no longer needed, simply to preserve jobs and hedge against any future war. Instead, some contractors now face years of shrinking profits and a growing likelihood of being forced out of business like airplane making and shipbuilding, where the military's reduced needs could be met fewer companies."

Richard W. Stevenson, New York Times,12/29/89, p. C1

"President Bush and Congress have begun to shrink the American military industrial complex, a process that will require the most fundamental restructuring since the United States embarked on the strategy of 'containment' of the Soviet Union after World War II, according to numerous defense specialists.

"With the Warsaw Pact breaking up like an ice pack under a hot sun, Pentagon leaders suddenly find themselves without justification for a $300 billion military establishment, 60% of which is designed to fight a land war in Europe that now looks like a remote possibility.

"The process of deciding on and then executing cuts in today's force of 2.1 million soldiers, sailors, airmen and marines and their arsenal will preoccupy the U.S. government and reverberate through the national economy and local communities for the rest of the century at least, many specialists predict."

George C. Wilson, Washington Post,11/26/89, p. 1

"The debate concluded this fall over the fiscal 1990 defense budget was the last of its kind. It was driven by the federal deficit, by pressure to increase spending in other areas and by President Bush's vow -- 'read my lips' -- of no new taxes.

"These arguments had little to do with what is happening in the Soviet Union. But we've entered a new era, the Mikhail Gorbechev era. The next defense budget well be Gorbachev-driven, and the next debate will reflect that; in fact, it's already begun."

Les Aspin, Los Angeles Times,11/27/89, p. B7