Salvation by Spending?

December 23, 1957

It will be some time before we feel the full impact of the blow to American prestige caused first by the sensational launching of the two Russian satellites and then by our own dismal failure at Cape Canaveral. Had any of the excuses so freely offered after the failure been put forward as clear warnings even 24 hours before it, they might have had the desired effect. As it was, the elaborate advance build-up caused the fiasco to do us the maximum harm. It was not reassuring to be told after the event that failure might have been expected because “this was our first attempt.” This merely underlines our irretrievable loss of six years when the Russians were laying the groundwork for their missile program between 1945 and 1951. That loss cannot be made up overnight. Our very excuses concede that the Russians are far ahead of us in satellite development—and, presumably, in long-range ballistic missiles.

What is disturbing is not merely our present humiliation but the wrong lessons being widely drawn. Most of the Democrats in Congress now blame our present predicament on the alleged “economy-mindedness” of the Eisenhower Administration. This is a strange accusation to bring against an Administration that presented a year ago the record-breaking peacetime spending budget of $72 billion. We are in our present plight not because of “economy,” but because of fantastic misspending. On our entire earth-satellite program we have spent only $110 million out of a total 1958 budget nearly 700 times as great.

WHERE WE CAN CUT

The present pious professions of inability to cut the overall budget ignore the flagrant facts. It has been repeatedly pointed out that our non-defense spending alone now comes to something like $28 billion a year. This includes $5 billion for thoroughly mischievous agricultural price supports and subsidies for not producing. It includes grossly swollen items like $4 billion for foreign aid, $5 billion for veterans’ benefits, and some $3.3 billion for “labor and welfare.” Yet with all the talk in Washington of the nation’s peril, nobody dares suggest slashing these items. It is only the taxpayers, those who earn the money from which these handouts are taken, who are being told they must make further sacrifices.

And what of so-called “defense” spending itself? One hears not a word now of the huge wastes in overbuilding, overbuying, and overstaffing pointed out by the Hoover commission. (In 1954 the Army had a ten years’ supply of women’s uniforms. The Navy had enough canned hamburger to last for 60 years, though it barely keeps for two.) We are still busily turning out obsolescent weapons. The most careful study needs to be given to the persuasive proposals of J. Sterling Livingston in the Harvard Business Review that (1) technical problems of future weapons development should be taken out of military hands and put in a civilian agency and (2) private firms should be given greater profit incentives and more freedom to pursue their own research and development.

FUTILE FOREIGN AID

The most irrational response to the Russian sputniks and our own failure is the proposal to increase still further the huge sums we are giving away to foreign countries. We have already granted them some $60 billion since the end of the second world war. This did not in the least deter the press of these countries from taunting and jeering us when our Vanguard fizzled. Suppose we had given them not a cent, and instead of dissipating our strength had used a fraction of that sum to keep unchallengeably ahead of Russia in military weapons and research? We would have helped those nations, as well as ourselves, far more than we actually have. It is futile to try to buy a nation’s good will when one has lost its respect.

The proposals in Washington to meet the new Russian threat by increasing foreign handouts, spending more in all directions, and resuming debasement of the currency by inflating still further, suggest a panicky motorist who, when he suspects he is on the wrong road, refuses to stop and take his bearings, but frantically increases his speed in the same direction that he has been going.