NCPA - National Center for Policy Analysis

Subsidizing Arms Sales

September 27, 1999

The Pentagon claims the military is starved for funds and service readiness is suffering. Yet it is spending billions to subsidize and promote military exports.

  • The federal government spent $7.9 billion in 1996 to promote $12 billion worth of global arms sales.
  • The Defense Department has given grants and loans to Albania, Bulgaria, Cambodia, Egypt, Estonia, Greece, Israel, Kyrgyzstan, Macedonia, Russia, Turkey, Uzbekistan and numerous other nations to buy U.S. weapons.
  • Between 1990 and 1995 the Pentagon dumped -- as gifts or at deep discounts -- weapons that originally cost $8.7 billion.
  • The Pentagon has even provided as much as $1.8 billion to underwrite corporate mergers among arms makers.

The Federation of American Scientists has observed that the services "appear to be giving away still useful equipment to justify procurement of new weaponry."

Procurement, itself, is a source of waste, experts report. The Pentagon buys $120 billion in goods and services every year. Often the purchases are made in districts and states of congressional leaders or members of key committees.

Source: Doug Bandow (Cato Institute), "Kill Defense Pork," Investor's Business Daily, September 27, 1999.


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