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The Economic Drain. Veterans Administration payments constitute another long-lived but little-noted expense of every war since the Civil War. This year they will add up to about $8.9 billion in disability pensions, education aid and medical care. Since 1965, costs of VA medical care have climbed by $500 million; almost all of the rise is attributable to the Viet Nam War. And forthcoming costs to the nation amount to a large mortgage on the future. Economist James Clayton of the University of Utah estimates that the total cost of pensions for Viet Nam veterans alone will eventually reach $220 billion.
Economist Robert Eisner of Northwestern University calculates that the Viet Nam conflict has already cost the nation $219 billion.
Direct war expenditures accounted for $113 billion. In terms of production lost because young men went into service or stayed in school to avoid the draft, the civilian economy lost another $82.5 billion, by Eisner's estimate. The human cost of the dead and wounded is incalculable; the economic drain, in terms of demand and production that will never be realized, is calculated by Eisner at $23.1 billion.
Since 1965, Eisner figures that real corporate profits, adjusted for the war-fueled inflation, declined by 17%. He calculates that soaring prices also have caused the real average income of the U.S. production worker to dip by about 2% in the past five years. 'This loss in income," says Eisner, "must be a major factor in working-class malaise and tension."
Technological Drip-Out. The debilitating effects of the nation's longest war will probably forestall many of the anticipated advantages of a peacetime economy. For example, concern is growing about the economic distortion created by the relationship between the Pentagon and defense companies.
Some of the nation's most inventive companies, and many of its best managers, scientists and skilled workers, have devoted their energies to military production. Assistant Treasury .Secretary Murray Weidenbaum wonders whether they can ever contribute much to a civilian economy. In a paper written just before he joined the Administration. Weidenbaum observed: "The Defense Department has slowly taken over many of the decision-making functions which are normally the prerogative of business management: the choice of products to produce, the source of capital funds, the internal operations of the firm." As a consequence, these firms have drifted far from the marketing realities of a civilian economy.
Most of the federally sponsored research in the last decade has focused on space and defense and has had limited practical use. "The supposed technological fallout from the NASA program has been more of a drip-out," says Physicist Ralph Lapp. He characterizes the Saturn F-l moon rocket as a typical example of "techno-giantism," which involves enormous effort and expense to perform an exquisitely specialized task, but so far has almost no application for a civilian market.