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The federal government is spending more on national defense — $660 billion in 2007 — than any time since 1945 (after adjusting for inflation) and a good portion of this money is going to rural America. Defense spending has been one of the fastest-growing sectors of the rural economy since 2001 and rural communities are expected to continue to receive a disproportionate share of the nation’s defense dollars as the government looks to move bases and troops away from major population centers.
Chad Wilkerson and Megan Williams report in the Kansas City Federal Reserve Bank’s publication Main Street Economist that rural “growth in the two largest components of U.S. defense spending, military incomes and defense contracts, has exceeded overall rural GDP (gross domestic product) growth by a wide margin.”
The two economists figure military incomes and defense contracts alone account for more than 4 percent of total rural economic growth since 2001.