excessive deficit has to be reduced. But there are various ways to cut state
expenditure. Reductions in salaries and pensions and increases in taxation are
not the only solutions. For example, Greece had the highest military budget
across the entire EU, proportionate to population. Defence spending as a
proportion of GDP was over one percentage point higher than the European
average.21 This needed to be drastically reduced, but it was not. Even as late
as April 2012, the Minister of Defence presented the acquisition of 400 tanks
from the USA (at no cost) as a major
, the part is taken for the whole.
Economists and policymakers have for the past thirty years
increasingly focused on the competitive and high-tech part of
the economy, and mundane activities have vanished from view.
The problems of GDP thinking are well known. National
income accounting was developed during the Second World
War in the US and UK as part of mobilisation for total war
(Re)discovering the foundational
so that US policymakers could judge the balance between
military and civilian output and the UK policymakers could
curb inflation at full employment
London: Routledge, 1999, 14.
35 Mitchell, ‘Fixing the economy’, 86–7.
36 See Mark Guglielmo, ‘The contribution of economists to military intelligence during World War II’, Journal of Economic History 68(1) (2008):
109–50; and Michael Bernstein, ‘American economics and the national
security state, 1941–1953’, Radical History Review 63 (1995): 9–26.
37 Paul Samuelson, ‘Unemployment ahead: a warning to the Washington
expert’, The New Republic, 11 September 1944: 297–9.
38 Evans, Macroeconomic Forecasting, 13.
39 Raymond F. Mikesell
GDP ratio to 46% in 1997, the highest in the
Haggard (2000, 49) deﬁnes a veto gate as an institution that has the power to
veto a policy proposal, thus forcing a reversion to the status quo. Veto gates can
include the president, the legislature, a second chamber of the legislature, a
committee within a legislature, or the courts. In authoritarian governments, they
may include the military. The preferences of these veto gates may be more or
less closely aligned: thus the president and the legislature may represent distinct
veto gates, but may either be of