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56421. Corporate Welfare for Weapons Makers the Hidden Costs of Spending on Defense and Foreign Aid

Author:
William D. Hartung
Publication Date:
08-1999
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
The defense and foreign aid budgets are the largest single source of government funding for private corporations. More than half of U.S. weapons sales are now being financed by taxpayers instead of foreign arms purchasers. During fiscal year 1996 (the last year for which full statistics are available), the government spent more than $7.9 billion to help U.S. companies secure just over $12 billion in agreements for new international arms sales. The annual $7.9 billion in subsidies includes taxpayer-backed loans, grants, and government promotional activities that help U.S. weapons makers sell their products to foreign customers. Also, the provision of low-cost facilities and extensive subsidies for research and development and mergers and acquisitions to major contractors fosters a “risk-free” environment in which weapons makers have little economic incentive to produce effective systems at affordable prices. Furthermore, a portion of the $120 billion the Pentagon spends each year on contracts with U.S. defense contractors is being wasted on defense pork—that is, redundant or unneeded weapons systems. Such subsidies and spending for defense pork can interfere with the fulfillment of legitimate security needs.
Topic:
Defense Policy, Arms Control and Proliferation, Climate Change, Government, and Industrial Policy
Political Geography:
United States

56422. Replacing Potemkin Capitalism: Russia's Need for a Free-Market Financial System

Author:
Kurt Schuler and George A. Selgin
Publication Date:
06-1999
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
On August 17, 1998, Russia devalued the ruble and stopped payment on its government debt, creating a financial crisis that continues today. Some observers have blamed the financial crisis, and the poor performance of the Russian economy generally, on government policies that they claim are rigidly laissez faire. However, a closer look at the Russian financial system reveals that it remains fundamentally socialist, though it has superficial capitalist features.
Topic:
Debt, Economics, Government, and Financial Crisis
Political Geography:
Russia, Europe, and Asia

56423. Blunder in the Balkans: The Clinton Administration's Bungled War against Serbia

Author:
Christopher Layne
Publication Date:
05-1999
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
The Clinton administration has made one miscalculation after another in dealing with the Kosovo crisis. U.S. officials and their NATO colleagues never understood the historical and emotional importance of Kosovo to the Serbia n people, believing instead that Belgrade's harsh repression of the ethnic Albanian secessionist movement in Kosovo merely reflected the will of President Slobodan Milosevic of Yugoslavia. The administration's foreign policy team mistakenly concluded that, under a threat of air strikes, the Yugoslav government would sign a dictate d peace accord (the Rambouillet agreement) to be implemented by a NATO peacekeeping force in Kosovo. Even if Milosevic initially refused to sign the Rambouillet agreement, administration leaders believed that Belgrade would relent after a brief “demonstration” bombing campaign. Those calculations proved to be disastrously wrong.
Topic:
Conflict Resolution, International Relations, Foreign Policy, NATO, and Ethnic Conflict
Political Geography:
Russia, United States, China, Europe, Eastern Europe, Asia, Kosovo, Yugoslavia, Serbia, Balkans, and Albania

56424. Old Wine in New Bottles: The Pentagon's East Asia Security Strategy Report

Author:
Doug Bandow
Publication Date:
05-1999
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
To contain Soviet-led communism and, secondarily, to prevent a militarily resurgent Japan, Washington established a network of alliances, bases, and deployments throughout East Asia after World War II. By the 1990s the Soviet Union had imploded, China had become a reasonably restrained international player, and other communist states had lost their ideological edge. At the same time, the noncommunist nations had leaped ahead economically. Despite such momentous developments, however, U.S. policy remains fundamentally the same.
Topic:
Security, Foreign Policy, and Defense Policy
Political Geography:
United States, Japan, China, Washington, Israel, and Soviet Union

56425. Is Readiness Overrated? Implications for a Tiered Readiness Force Structure

Author:
James L. George
Publication Date:
04-1999
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Readiness, the capability to respond quickly to a conflict with the appropriate force, is considered one of the most important elements in defense planning. From one-third to well over one-half of the defense budget goes toward maintaining readiness. Few people questioned the need for readiness, especially after the attack by North Korea against South Korea in 1950 and during the Cold War, when the Soviet-led Warsaw Pact was poised to quickly thrust into Western Europe without much warning.
Topic:
Security, Defense Policy, and Cold War
Political Geography:
United States, South Korea, North Korea, and Western Europe

56426. In Praise and Criticism of Mexico's Pension Reform

Author:
L. Jacobo Rodriguez
Publication Date:
04-1999
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
The privatization of Mexico's government-run pay-as-you-go social security system, which went into effect in July 1997, is the Ernesto Zedillo administration's most important structural reform. It is a measure that, if successful, will help bring much-needed social and economic stability. The Mexican peso crisis of 1994–95 underscore d the fragility of Mexico's economy, its need for independent institutions, and its need for a large pool of long-term domestic savings. An increase in the rate of private savings in Mexico, which this reform will promote, would make the Mexican economy less dependent on short-term fluctuations of international capital flows and, thus, more stable. More important still, the privatization of social security will erect one of the basic pillars of a free society by turning Mexico into a country of property-owning workers.
Topic:
Economics, Government, International Political Economy, and Privatization
Political Geography:
Latin America and Mexico

56427. National Missile Defense: Examining the Options

Author:
Charles V. Peña and Barbara Conry
Publication Date:
03-1999
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
To date, the debate surrounding national missile defense (NMD) has been dominated by political rhetoric. Supporters (usually conservatives) often paint a “doom-and-gloom” picture, pointing out that the United States is vulnerable to an attack by ballistic missiles. Critics (usually liberals) defend the Anti-Ballistic Missile Treaty as the cornerstone of deterrence and stability and argue that any defensive deployment would upset the balance between the offensive strategic nuclear forces of the United States and Russia.
Topic:
Defense Policy
Political Geography:
Russia and United States

56428. U.S. Assistance for Market Reforms: Foreign Aid Failures in Russia and the Former Soviet Bloc

Author:
Janine R. Wedel
Publication Date:
03-1999
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Since the fall of the Berlin Wall in 1989 and the subsequent breakup of the Soviet Union in 1991, the governments of the United States and other Western countries have provided massive aid to promote a transition to the free market in Central and Eastern Europe and the former Soviet Union. But aid for market reforms in the region has been largely ineffective. Whether provided in the form of technical assistance, grants to political groups or nongovernmental organizations, loans and guarantees to the private sector, or direct financial aid to post-communist governments, that aid has been plagued by a number of problems. The failed $22.6 billion bailout of Russia by the International Monetary Fund in July 1998 only confirmed the flawed nature of the aid-for-reform approach.
Topic:
Economics and Emerging Markets
Political Geography:
Russia, United States, Europe, Eastern Europe, Asia, and Soviet Union

56429. Tilting at Windmills: Post-Cold War Military Threats to U.S. Security

Author:
Ivan Eland
Publication Date:
02-1999
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
Serious military threats to U.S. security have diminished dramatically since the end of the Cold War. The threat from conventional Russian military forces has all but disintegrated and would take many years to reconstitute. China would take 20 to 30 years to transform its bloated and obsolete military into a major threat to U.S. vital interests. The militaries in both nations should be watched, but they may never develop into credible threats.
Topic:
Security, Defense Policy, Arms Control and Proliferation, Cold War, Nuclear Weapons, and Terrorism
Political Geography:
United States

56430. The Comprehensive Test Ban Treaty: The Costs Outweigh the Benefits

Author:
Kathleen C. Bailey
Publication Date:
01-1999
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
The Comprehensive Test Ban Treaty (CTBT) is now before the U.S. Senate for its advice and consent. The treaty bans all explosive testing of nuclear weapons. Advocates of the CTBT make several arguments in support of the treaty. The reasons reduce to two points: the ban will constrain the modernization and development of nuclear weapons by the nations that already possess them, and it will help prevent the spread of nuclear weapons to additional nations. Both objectives are set out in the CTBT's preamble.
Topic:
Security, Arms Control and Proliferation, and Nuclear Weapons
Political Geography:
United States