I am going to park the China discussion for now. I don't have the time to do both debates justice and I am choosing to discuss the Clinton vs Bush years regarding the future of the military as I find that a more interesting topic at the moment. Feel free to tag me in the China thread in a month or two and as time allows we can continue that.
The first thing is we have to acknowledge the difference between a good decision given imperfect information vs. hindsight. To use a poker analogy, if someone raises when they have a hand that beats every possible hand an opponent could have, except if the opponent gets a single card on the river then that is a sensible, logical and smart bet. If the opponent calls, or even counter-raises, and then draws the single card on the river that allows them to win, that result doesn't mean the first player made a bad decision. The first player still made a perfectly rational decision based on the information they had available to them at the time. This happens a lot in poker and bad players always think things like "oh I shouldn't have raised". With imperfect information, you have to play the probability and if the 1% or 5% hits, that's the breaks (as Kurtis Blow says).
Clinton's decision to draw down the military during his terms was perfectly logical given the information available at the time - the Cold War was over, there was no more major enemy. Fukuyama got famous for his End of History thesis in 92 touting that liberal democracy had won. All the conservatives thought Milton Friedman advice on the former Soviet Union was going to work spectacularly. Etc, etc. Drawing down the military was sensible given all the information available in 1992-93. In fact, it was Cheney under Bush I that first argued this.
Now, for "flat" I just looked at the budget in 1992 (~298b) vs the budget in 2000 (~294b) but as percent of GDP, you are correct that it was a reduction YoY (4.7% in 92 decreasing YoY to 2.9% in 2000) throughout his term so I'll correct my quick take there. You are right, it was a decrease YoY as percent of GDP.
But going back to the first point, there weren't really any reasons during the 1990s to think that wasn't the right thing to do as it contributed to budget surpluses that were universally hailed in econ circles c.2000. The 90s were a very optimistic decade. A lot of us in our 20s thought that it would be the first decade in a very different world than the entire Cold War. It looked like the world would simply become more prosperous for everyone. Then 9/11 happened.
Now, let's look at Bush and the Iraq disaster. The Iraq war
directly cost ~$1 trillion. If you add up all the cascading costs,
estimates are usually around the ~$2-2.2 trillion range. Those numbers are staggering. The opportunity cost is insane, no matter what your political views. Progressive can easily point to how that $2 trillion could have better benefited the people directly through health care and social services. Even military hawks, like the veterans I know, look at the huge opportunity cost of the Iraq war. Crusader's cancellation was a frequent mention with some people I know and a lot of people knew the Iraq War would eat hundreds of billions more than Bush admin estimated at the start and it would hurt preparedness long term, which it did (see James Fallow's
Bush's Lost Year article from 2004 or Nordhaus' analysis in 2002 that projected a $1.9 trillion cost, to see how many military and former military knew how stupid Iraq was going to be). By Bush, it was not even close to "too late" and the Reagan years prove that it wasn't.
For shipbuilding I'd rate it as a push. From an economic point of view, Clinton's budgets hurt for sure. But I don't think that was as obvious in the 1990s, whereas the opportunity cost of Bush's Iraq debacle was more obvious. you can blame them both for the shipbuilding. Without Iraq, Bush Admin could have efficiently simply reversed the Clinton era shipbuilding decision but it didn't because Iraq. And again, it wasn't as obvious in the 1990s that that would even matter. No one argued in 1994 that the US military needed shipbuilding at the same rate as during the Cold War which was the information everyone was working with in 92-94. Perot had he gotten elected, with his isolationist bent, would likely have done exactly what Clinton did with military budgets.
