When it comes to the defense of the United States, many would argue that no expense is too great. And while this nation’s security must stand among the most inviolate duties of government, a similar argument can be made that the law of diminishing returns is at play with debate over the Pentagon’s budget for the coming year.
On Tuesday, Defense Secretary Ashton Carter unveiled his department’s vision for a future of battling the Islamic State and other adversaries. “Now we have to think and do a lot of different things about a lot of different challenges — not just ISIL and other terrorist groups, but also competitors like Russia and China, and threats like North Korea and Iran,” Carter said during a speech at the Economic Club in Washington, D.C.
Undoubtedly, the world is a dangerous place, and the United States has antagonists ranging from nations who are challengers for global influence to non-nations motivated by murderous demagoguery. Carter said the Pentagon is planning to increase spending for fighting Islamic State by 50 percent, to $7.5 billion, and to quadruple spending in Europe to reassure allies and deter Russian aggression.
Because Congress approved and President Barack Obama signed a two-year budget agreement last fall, those expenses will draw money from elsewhere in this year’s $582 billion defense budget. And that is what brings us to the law of diminishing returns, an economic principle that says at a certain point, increased spending on an item only marginally improves effectiveness (or, in the case of a business, profit margin).