| The question of whether or not the peace dividend exists is ongoing. There are those who believe tradeoffs exist between defense and various social programs. Several claim there is no evidence to support tradeoffs. Authors finding tradeoffs conclude tradeoffs are either a one-for-one direct input to various social programs, indirect benefits through lower taxes and/or lower deficits, or investments for the future as industrial and base conversions from defense to civilian use proceeds. The common thread seems to be that a benefit must be evident when nations no longer spend large amounts for defense. This benefit is called the peace dividend. It is found when defense expenditures change inversely to changes in social security expenditures and Gross National Income (GNI).; The bulk of research on tradeoffs pre-dates the fall of the Berlin Wall and the declared of the end of the Cold War. Tradeoffs have been found between defense and education, health, welfare, social security, and GNI during only one period in time. This finding has been confirmed by several authors and replicated here. However, this research endeavor provides an important extension. Many nations have experienced this lone exception. This exception to the no tradeoff rule---the Reagan Effect---is universal. The United States purposefully sacrificed social welfare and GNI for increased military expenditures. Several NATO nations plus Australia and Japan as well as Hungary and Romania appear to have followed suit.; In addition, all eight nations experienced second phenomena. Social security expenditures were consistently higher than military expenditures with the exception of 1981 to 1983.; Defense and social security spending, as well as GNI, remain consistent across time. Over the long-term, defense spending has declined while social security funding increases or, at least, maintains spending higher than defense. Gross National Income rises and falls independent of both.; In the final analysis, the questions of tradeoffs are no longer at issue. As this study concludes, discretionary budgets do not compete with nondiscretionary programs for funding. |
