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As a start, Defense Secretary Neil McElroy intends to boost defense spending at least $1 billion in the first six months. For fiscal 1959, there will probably be another boost of at least $2 billion (to $41 billion for actual defense spending), plus a $5 billion boost in the obligational authority for future defense contracts. The Administration hopes to hold down the totals by cutting such items as the farm program and aid to veterans, but few politicos think it will be successful. If anything, spending on the farm program—a huge $5 billion in 1957—may rise in 1958 to keep surplus food from collapsing the market. At year's end the 1958 harvest of the winter wheat crop was estimated at a near record of 906 million bu., 28% above the year before and one more sad reminder of the failure of the farm program to cut surpluses. With revenues estimated at $73.5 billion—or less—next year and a budget of $73 billion to $74 billion, the U.S. will probably be in for deficit financing and, as Treasury Secretary Robert Anderson conceded, a long-delayed rise in the $275 billion national debt.
The new spending also means that inflation, which dogged the U.S. throughout 1957, will still be present in 1958. The defense speedup may well take up all the deflationary slack in the U.S. economy, and push on from there. While missiles do not require the mountainous raw materials of tanks and planes, they need more and higher-paid skills, on an ever-spreading base. In turn, this means more money in the pockets of consumers for more autos, more appliances, more luxuries of all kinds.
Most experts feel that a few more billions for defense in fiscal 1959 will be only a starter, since the U.S. has not yet faced up to the fantastic cost of building an on-the-firing-line array of missiles. Nor has it faced up to the enormous cost of some of the other space projects now being discussed, such as a manned satellite. No missileman doubts that the U.S. will have to engage in such projects; all assume the Russians are working on them.
Since 1946, missile spending has skyrocketed from $70 million to $3 billion annually. But in actual fact, the U.S. intermediate (IRBM) and intercontinental (ICBM) missile programs are still in the experimental stages. Intermediate missiles alone may cost the U.S. $7 billion; the bigger, 5,000-mile Atlas ICBM will cost $8 billion to $10 billion in the next decade or so before it is superseded by something better. And missile programs themselves will get bigger and more expensive.
Totting up the bill for the next ten to 20 years, defense experts estimate that arms will probably rise $3 billion each year for the next seven years at least, since the economy must produce not only missiles but conventional arms. At year's end a group of eminent scientists urged that the U.S. spend at least $1 billion annually on space research alone.
Some projects and prices:
¶ Anti-missile missile—$6 billion to $7 billion.
¶ Manned satellite—$3 billion to $4 billion.
¶ Manned rocket to the moon—$5 billion.