Share of GDP
Mark Shields has a rant
in the Post
today about how we could field a much better army in World War II, even though we were smaller and poorer, than we can today. I'm not too interested in that debate, but the comparison got me thinking about something else.
Conventional wisdom tells us that the baby boomers and our aging society are expected to cause a crisis. Indeed, according to the a 2002 report
by the Congressional Budget Office, public pension spending (Social Security and Medicare) will jump from 6.7 percent of GDP in 2002 to around 12.1 percent in 2040. That sounds bad! Except consider this: In 1950 defense spending
was a modest 5 percent of GDP. Only three years later, it had ballooned to 14.2 percent
of GDP, and didn't drop down below 9 percent until over a decade later (this wasn't just a pig-through-the-python deal). And all the while, the country enjoyed healthy economic growth and endured the scantest of deficits.
Obviously there are some differences, but the basic fact is: in 1950 the U.S. could weather a rapid spike that was greater
than the predicted rise caused by our Baby Boomers. The "coming generational storm" is nothing the country hasn't dealt with before, and there's no reason to panic, as the president is doing. Planning calmly and responsibly for the future is the best thing we can do.