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April 19, 2007

How big is the defense budget

President Bush has asked Congress to approve a defense budget for the upcoming fiscal year of more than $600 billion, the largest on record. But N.C. State University's Mike Walden recommends another way to put his big figure into perspective.

"We always have an issue here when we are looking at big government budgets," says Dr. Walden, an economist with North Carolina Cooperative Extension. "I mean, virtually everything the government does you are going to have a big number. It's going to look gigantic to the average person.

"Economists ... advise people to look at these big budgets and ... do the following: Think of the economy as a pie, a big pie, and then you ask what slice of that pie is going to different functions, like health care, like food, and, in this case, military spending.

"And when we do that, for example, we see that the budget the president is recommending would take 4 percent of that economic pie.

"Now this, indeed, is up from 3 percent in 2000, but it is down from the 6 percent slice that the military took in the 1980s, the 10 percent slice that the military took in the Vietnam War era, and the 35 percent slice, of course, the military took during World War II.

"So this would be a way that economists recommend (so) that folks are able to get a handle on such big budget numbers."

Posted by deeshore at April 19, 2007 08:58 AM