Converting Resources from Military to Non-Military Uses

Abstract

As a proportion of gross national product, U.S. military spending has declined steadily since the mid-1980s. The end of the Cold War has given rise to calls for even more cuts in military spending. In early 1992, President George Bush proposed to reduce military spending by 3 percent per year, in real dollars, for the next five years. The Democratic leadership in the House of Representatives countered with a plan calling for substantially deeper cuts. Any substantial changes in military expenditures imply a “conversion” of physical and human resources from military to nonmilitary uses. This article will focus on some distinctive characteristics of the U.S. military sector and on some adjustment costs that reduced military spending are likely to impose on military industries, occupations, regions, and communities.