Welfare for Arms Dealers 
by William D. Hartung, World Policy Institute
and the New School for Social Research
---------------------------------------------

Here are the major findings discussed in Welfare for Weapons Dealers:
The Hidden Costs of the Arms Trade, 1996 Edition:

Pumping Up Welfare for Arms Merchants: Federal subsidies for arms
exports have jumped from US $7 billion in FY 1994 to US $7.6 billion
in 1995, an increase of 8.5%. This represents the second largest
subsidy program for business in the entire federal budget (after
agricultural price supports).

Uncle Sam, Arms Broker: The U.S. government is the world's largest
arms broker, spending over US $450 million and employing nearly 6,500
personnel to promote and service foreign arms sales by U.S. companies.
The Pentagon has a full-time, arms sales staff of 6,395, a 7.5%
increase since Clinton took office.

Air Show Subsidies Soar: Federal government expenditures on promoting
weapons at international air and trade shows now average over US $26.5
million per year, a figure 26 times greater than the official cost
estimates the Pentagon provides to Congress.

Increasing Subsidies, Diminishing Returns: Taxpayer subsidies of US
$7.6 billion accounted for more than one-half the value of U.S. arms
exports in 1995, which totaled an estimated US $12 billion. With
subsidies scheduled to increase and the Pentagon projecting the
international market for U.S. arms at US $12 to US $16 billion per
year for the foreseeable future, more than half of U.S. weapons sales
through the end of this decade will be paid for by U.S. taxpayers, not
foreign customers.

Offsetting Costs, Exporting Jobs: Due to the growing practice of
providing industrial offsets to U.S. arms clients, many major arms
deals now produce more jobs overseas than they do in the U.S. For
example, components for the Lockheed Martin F-16 fighter are now being
produced in ten foreign countries. There are nearly twice as many
workers employed building F-16s in Ankara, Turkey (2,000) as there are
at Lockheed Martin's principal F-16 plant in the U.S., in Fort Worth,
Texas (1,155)

Militarizing Foreign Aid: In 1995, subsidies for arms exports
accounted for over 50% of U.S. bilateral aid, and more than 39% of
total U.S. foreign aid. This emphasis on promoting weapons exports has
come at the expense of programs designed to promote economic
development and social welfare in recipient nations.

The Arms Export Lobby Cashes In: Government-sponsored arms deals
benefit a handful of major defense contractors. During the first two
years of the Clinton Administration, the top 15 arms exporting
companies received US $12.2 billion in foreign military sales
contracts from the Pentagon, with Lockheed Martin (US $2.8 billion)
and McDonnell Douglas (US $2.6 billion) leading the pack.

Source: "Summary of Major Findings," Welfare for Weapons Dealers: The
Hidden Costs of the Arms Trade, 1996 Edition. Published by the World
Policy Institute, N.Y., USA.