
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, February 26, 1991                   TAG: 9102260394
SECTION: EDITORIAL                    PAGE: A-7   EDITION: METRO 
SOURCE: VITTORIO BONOMO
DATELINE:                                 LENGTH: Medium

THE COSTS OUTWEIGH ANY BENEFIT

WITHOUT question, Virginia's economy is heavily dependent upon the defense industry. By some measures, Virginia is ranked second, behind the more populous state of California, in defense spending and in presence of military-related personnel. One would expect, therefore, that the recent military action in the Persian Gulf would impact favorably upon the commonwealth and its residents.

But a full and proper accounting of the Gulf War's benefits and costs suggests a different conclusion. Many will point to the economic and employment benefit that will result from new orders being placed for military supplies and ordnance, some of which is produced in Virginia. These positive economic results, however, are not without costs and sacrifices.

Since Virginia ranks second among states in military active-duty pay and eighth in reserve and national guard pay, it is obvious that Virginians are bearing a disproportionate share of the national costs associated with the relocation of fighting men and women to the Middle East theater of operations and by the activation of civilians through reserve and national guard call-ups.

These dedicated and courageous Virginians, along with their families, sacrifice in a wide variety of ways. These are losses for which we have no economic measure. There is the separation from families and friends, and from the comforts of American life. There is the loss of higher civilian pay and interruption of careers that is borne by those activated to duty. There is the loss of household production (child-care and child-rearing duties, repairs and maintenance around the home, etc.) that may force families left behind to spend more to replace that household production. And there is the ultimate sacrifice, the loss of life and limb, of which Virginia will bear a disproportionate share.

But what about the economic benefits to other Virginians? I think these have been overstated. While a war is being fought overseas with a disproportionate number of Virginia-based personnel in action, the local businesses that in peacetime serve the troops, at Norfolk and elsewhere, suffer badly from diminished busiess activity. These losses are compounded when family members of overseas service personnel move back to their parents' homes, and away from the base and Virginia, while the war is going on. Ask retailers near the Norfolk Naval Base whether they are reaping financial benefit from the Gulf War. They will tell you of the sacrifices that they too are making.

What about the long-term impact of the Gulf War? Before this conflict, the encouraging thawing of the Cold War had set into motion a reduction in the rate of increase in defense spending. I suspect that the recent unexpected shortfall in state revenues is a manifestation of such cutbacks in the rate of increase in defense spending.

The Gulf War has perhaps reversed this trend. More likely, however, is that once the current hostilities are resolved, the future path of defense spending will be at a lower level.

President Bush has stated that the Gulf War is a moral war which, if successful, will signal a "new world order" of international cooperation that will make future military conflicts less likely. If that prognosis is correct, then the long-run impact of the Gulf War on the Virginia economy will be substantial. If we are heavily dependent upon defense expenditures, if and when peace breaks out, Virginia will suffer declining revenues, unemployment and reduced government services, until the shift to a more diversified economy can be made.

The great tragedy of such expanded conflict and casualties for Virginia is that Virginians would be disproportionately bearing the economic and human cost of the war, without receiving adequate economic benefits - if that is possible.

One final point, as we think about the benefits and costs of war. Even though a war may be just and necessary to protect our freedoms, the preservation of those freedoms is costly. While some may benefit temporarily, such as the workers in a factory in New Jersey who received a rush order for body bags, other Americans suffer losses, perhaps great losses. In war, the return trip in body bags is of service personnel from all these United States. Whether or not those bags are made in Virginia seems of little significance.

by CNB