TAILIEUCHUNG - Economics and National Security: Issues and Implications for U.S. Policy

The table reveals that no previous study has used productivity growth or growth in value added as growth indicators to define HGFs when their economic contribution has been analyzed. 6 Productivity has been discussed in the literature on HGFs prior to this paper (Acs et al., 2008; Fritsch and Mueller, 2004; Littunen and Thomo, 2003). However, little has been made of this observation. Fritsch and Mueller (2004) stress the difficulties in gathering data on productivity, which can explain why no previous study has explicitly addressed this issue. Furthermore, while most studies discuss the contribution of HGFs to employment, no study. | Economics and National Security Issues and Implications for . Policy Dick K. Nanto Coordinator Specialist in Industry and Trade January 4 2011 Congressional Research Service 7-5700 R41589 CRS Report for Congress------------- Prepared for Members and Committees of Congress Economics and National Security Issues and Implications for . Summary As the world begins the second decade of the twenty-first century the United States holds what should be a winning hand of a preeminent military large economy strong alliances and democratic values. The nation s security should be secure. Yet the debate over national security seems to be both intensifying and broadening. The problem appears not only in the difficulty of finding a winning strategy in the long war against acts of terrorism but having to face economic constraints that loom large in the public debate. In addition the global financial crisis and recession have highlighted the trade-off between spending to protect against external threats and spending to provide jobs and income for citizens at home. The United States has long been accustomed to pursuing a rich man s approach to national security. The country could field an overwhelming fighting force and combine it with economic power and leadership in global affairs to bring to bear far greater resources than any other country against any threat to the nation s security. The economy has always been there both to provide the funds and materiel for defense and to provide economic security for most households. Policies for economic growth and issues such as unemployment have been viewed as domestic problems largely separate from considerations of national security. The world however has changed. Globalization the rise of China the prospect of an unsustainable debt burden unprecedented federal budget deficits the success of mixed economies with both state-owned and private businesses huge imbalances in international trade and capital flows and high .

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