Analyzing the Evidence Exercises

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The national debt has increased significantly over the past decade for a variety of reasons — shrinking revenues due to tax cuts and the recession, increased spending on a variety of programs (including economic stimulus), as well as the costs of the wars in Iraq and Afghanistan. The figure below shows military expenditures since 2001.

Military Expenditures since 2001

1.
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How much does the United States spend on defense now in comparison to 2001?
2.
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How much of this change is a result of an increase in the “base” budget versus the cost of conducting operations in Iraq and Afghanistan?
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Defense spending comprises only about half of the discretionary budget of the United States, and less than 20 percent of total federal spending. As Congress debated extending the debt limit in 2011, Republicans demanded corresponding savings in future years’ budgets. If the Congress (and the “supercommittee” it created) proved unable to make the hard choices about closing the budget deficit, then automatic across-the-board cuts in the discretionary budget would be implemented. This meant that mandatory spending on entitlements like Social Security and Medicare would be shielded from cuts.
3.
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What would it mean for the defense budget if the across-the-board cuts were implemented?
4.
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Why might policymakers have chosen a “trigger” that imposes such a substantial penalty on defense spending if negotiators failed to reach an agreement?
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As this chapter’s Analyzing the Evidence unit notes, critics of the defense budget point out its significant growth over the past decade.i This figure shows that the increase in the federal budget over the past few decades is less attributable to defense spending, however, and more a result of growth in Social Security, Medicare, and Medicaid.ii
5.
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How has spending on defense versus these social programs changed over time?
6.
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What does this suggest about the formula for solving the budget deficit?
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i Moreover, according to the Peter G. Peterson Foundation, “The U.S. spent more on defense in 2010 than did the countries with the next 17 highest defense budgets combined.” www.pgpf.org/Chart-Archive/0053_defense-comparison.aspx (July 1, 2011) (accessed 2/22/12). 

ii Peter G. Peterson Foundation, “Growth in Social Security, Medicare, and Medicaid have more than offset declines in defense since the late 1960s,” February 1, 2011, www.pgpf.org/Chart-Archive/0013_spending-composition-simple.aspx (accessed 2/22/12) 

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