Economist and Kennesaw State professor Aniruddha Bagchi discussed the economic impacts of national security spending on March 15.
In the latest episode of KSU’s Research with Relevance series, Bagchi presented recent findings on how the U.S. government funds national security and at what cost. The hour-long video conference included a dissertation on the topic before an open discussion with students and faculty.
Bagchi’s research includes cost-benefit analysis which allows for comparison between economic factors and security costs. He said this method also makes room for the “more interesting things” to be considered.
“If you are spending money on security, then you are essentially diverting resources from alternate uses such as education or healthcare,” Bagchi said.
The presentation emphasized this point as Bagchi’s research considers two extremes of spending too much or too little on national security.
In the 20 years following the Sep. 11 attacks on the World Trade Center, homeland security costs have totaled over $1 trillion, according to dataincluded with President Biden’s 2022 budget proposal. This is over six times the amount allocated to this division in the 20 previous years.
“Either you take away money from education, health or any other important social sector, or you raise taxes,” Bagchi said.
He explained the dangers of diverting funds from these other sectors over extended periods, including a reduced long-term growth rate. The solution is to invest in security and social sectors with a balance, according to Bagchi.
Another significant aspect of Bagchi’s presentation was cybersecurity’s effect on the economy. Specifically, he discussed the government’s role in protecting private industries where cyber-attacks may have vast economic consequences.
Evoking his 2018 analysis on the subject, Bagchi explained that the government should continue providing private firms with intelligence. His analysis determined that the government controlling all aspects of cybersecurity would not prove sustainable across so many private firms.
“The government does have a role but it is more often advisory,” Bagchi said. “Ultimately you need a sort of partnership between the private sector and government to figure out vulnerabilities and limit cyber attacks.”
Bagchi nevertheless noted that developing nations may not have multiple options or expansive resources to direct towards security. He holds that these countries, and even superpowers such as the U.S., should spend “only as much in its self-interest”.
“What’s important is [nations] do only what is necessary,” Bagchi said. “If there’s a civil war that breaks out in some street corner of the world that doesn’t affect your commerce, throw the war.”
Since 2010, Bagchi has focused his research on security and its correlation to world economies. He has since earned the Outstanding Publication Prize from KSU’s Coles College of Business for researchpublished in the European Journal of Operational Research.
Bagchi was the fourth speaker of this season’s Research with Relevance series which highlights faculty research. To watch Bagchi’s presentation and learn about future speakers please visit the series’ webpage.