I have organized my paper in the form of speculative answers to three general questions. First, what are some of the things we know about military expenditures and the operations of the military establishment? Second, what have been the dimensions and nature of the Vietnam buildup, and what does our experience suggest about the adjustment problems likely to follow its termination? Finally, what can be said about the impact and consequences of some form of arms limitation? 1. What do we know about United States military expenditures and defense operations ? They are large and constitute the bulk of all goods and service outlays of the federal government. In the fiscal 1969 budget, national defense programs were estimated to account for $79.8 billion--43.7 per cent of the government's total expenditures for the year. Vietnam operations account for about one-third of defense expenditures. Military expenditures have not grown as rapidly as the over-all economy and thus represent a slightly smaller proportion of GNP than they did during the Korean War. I Only a relatively small number of industries (largely durable goods producers) are heavily involved in defense work, and only a few of their constituent companies account for the larger part of defense contracts. There is some evidence, however, that in recent years this concentration has lessened somewhat. Table 1 indicates a drop of roughly ten percentage points in the share of military prime contract awards accounted for by the top one hundred companies to 65.5 per cent between FY 1961 and FY 1967. This move toward deconcentration may well be a temporary phenomenon reflecting the peculiar needs of the Vietnam conflict. Forty-five firms have been on the list every year since fiscal 1959, and a number of others have put in frequent appearances. The distribution of military contract awards among the various regions of the country is quite uneven and changes over time. These points are illustrated in Table 2. Since the Korean War (FY 1952), the value of prime defense contracts awarded has dropped from 25 per cent to 17 per cent in the Middle Atlantic states; dropped from 27 per cent to 13 per cent in the East North Central region; and climbed sharply in the South, particularly in the South Central area, rising from 6 per cent to 17 per cent. The share of the Pacific Coast states, plus Alaska and Hawaii, at 20