Tag Archives: economic forecasting

Systemic Fiscal Optimism in Defense Planning


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Author: Leland G. Jordan

Defense planning and budgeting increase national security costs by significantly overestimating available future resources. An analysis of Department of Defense out-year resource estimates over a period of 20 years and six administrations—the first econometric analysis of budgeted and realized resources in defense—demonstrates that an optimistic bias has spanned administrations and appears to be a systemic characteristic rather than a political one. The result has significant implications for reduction of defense costs without loss of capability.

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