Here's How to Make a Real Stimulus Take Flight

In all the talk of economic stimulus in the White House and on Capitol Hill, one element has been conspicuously absent: defense programs. Yet including $20 billion to $25 billion per year of increased defense spending in the stimulus -- a tiny amount in a total package of hundreds of billions -- would be both smart politics and sound policy.

Take the substantive argument first. During the transition, the Obama team advanced three principles about stimulus spending: It should be timely, targeted and temporary. Defense programs more than meet these criteria, as many mainstream economists have pointed out. Compared with infrastructure programs that require lengthy planning, design and approval processes, extending efficient, already running defense procurements would have brief, as the military says, "flash-to-bang" times.

Increasing the size of the armed forces would have an even more direct and immediate effect on employment: Almost all military spending on personnel occurs within the year of appropriation. There would also be a secondary effect as thousands of young men and women who currently possess no skills receive training. People in military service learn a lot -- not just technical and technological skills but also the valuable traits of personal discipline and leadership. [snip]

However, the new director of the Office of Management and Budget, Peter Orszag, has just told the Defense Department to reduce its spending by 50 billion. Substituting accounting discipline for military judgment is not just questionable strategy but incongruous when the Obama administration is furiously trying to stimulate the economy.

Moreover, in ignoring defense needs, the president will be passing on an obvious route to bipartisanship -- pressing social-engineering liberals and green-eyeshade conservatives alike to focus on principled stimulus spending.

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