dr. fuller first. let's go to dr. fuller. >> i don't think i will argue with you, that money spent in government and is less efficient than in the private sector. i think the literature pretty well established that. so if i were examining the impacts of sequestration in terms of job creation, is this a good way to create jobs, i might produce a different outcome than what i reported, which is if you take $51 billion out of dod and 57, or whatever the numbers are, out of non-dod, isn't going to have an impact on employment? would increase unemployment? is there some aspect, some economic consequence that we should be aware of in making that decision? and if it's severe, and it is. i'm willing, i'm not the only one that comes up with these kinds of numbers, that there is a consequence. if you buy fewer airplanes, will there be fewer airplanes manufacturing jobs? yes. what will those people do? they will do something other than manufacture airplanes. and is that good? i'm not sure. does it cost us something? yes. unappoin

dr. fuller. or anyone on the panel, really. we mentioned that if the sequestered does not occur, then taxpayers will be financing that additional pentagon spending. i am curious if you or anyone on the panel has analyzed the job loss impact that we would incur as taxpayers have to pay that back with interest? >> i have not analyzed that. >> would either of you care to speculate? >> a person at boston university has done work on that issue -- what are the effects of exponentially increasing government debt, and i would not confuse that with interest payments. those are the two sides of the same coin. the present value of interest payments -- i would be careful about that, but i do not remember his most recent estimates. if you go to the boston university website, you will find a lot of work on that topic. >> spending is taxes. the counterpoint of your question is they are not going to raise taxes now when they do the spending. that means they will do it later. a perfect example is the stimulus bill. it did not create jobs. all w

dr. fuller. thank you very much. [applause] >> thanks, chris, i appreciate it. and thanks to cato for hosting the event and thanks to all of you for your time and attention. i want to discuss the topics. first, the simple analytics of proposed reductions in defense outlays in the context of gdp growth and aggregate employment. second, i want to offer a few brief comments on steve fuller's recent estimates of economic effects of cuts in defense spending, estimates that have received a substantial amount of attention recently. when i do that, i ask that you keep a straight face, steve, unlike the festivities last night. third, if you summary data on defense outlays on the relationship between defense outlays and gdp growth. what i will not discuss today is the appropriate size and composition of the defense budget. that would require a delineation of u.s. interest, vital, important, desirable, and marginal, and the required to defend them. you're not going to get into that today. so let me begin wi

dr. fuller. thank you very much. [applause] >> thanks, chris, i appreciate it.and thanks to cato for hosting the event and thanks to all of you for your time and attention. i want to discuss the topics. first, the simple analytics of proposed reductions in defense outlays in the context of gdp growth and aggregate employment. second, i want to offer a few brief comments on steve fuller's recent estimates of economic effects of cuts in defense spending, estimates that have received a substantial amount of attention recently. when i do that, i ask that you keep a straight face, steve, unlike the festivities last night. third, if you summary data on defense outlays on the relationship between defense outlays and gdp growth. what i will not discuss today is the appropriate size and composition of the defense budget. that would require a delineation of u.s. interest, vital, important, desirable, and marginal, and the required to defend them. you're not going to get into that today. so let me begin with a very simple thought experience. suppose the crime rate false an