I am highly dubious of all such claims, since they imply that current decision-makers are idiots, and that seems doubtful.
Indeed, no government institution has a stronger incentive to be cost-effective than the military, since lives and national survival are at stake.
Yes, I understand the role of Congress, and its need to keep projects in members' districts viable.
It is also historically true that no future war will be exactly the same as any past war, and therefore our current training & equipment may or may-not be effective when needed.
So the military must be prepared for any contingency, most of which will never happen, and that by definition is "wasteful".
Indeed, an astute enemy will study carefully exactly what we are and are-not prepared for, and will attack us in the latter.
So here's my point: budget cutting simply reduces the number of contingencies the military is prepared for, and increases the probability that we will be attacked in some area of weakness.
Phlyer: "So, my 'solution' would be to more or less hold the line on defense spending (~4.5% of GDP) for five years as part of a general spending reduction, then elevate it to ~7% when we've gotten overall spending in line."
Without knowing the true conditions of each service -- their training, equipment, morale, etc. -- it's impossible to say exactly what they need.
But if 5% under Bush II was adequate during war time, then surely it will be adequate in relatively peaceful years.
And that would avoid the need to ever increase to 7%, short of some unexpected national emergency.
As for where our Federal budget cuts should occur, I have a simple solution: get out a copy of the Constitution and read -- where does it specify each Federal function.
Those Federal functions not specified in the Constitution should be first for budget cuts.
Problem solved, right?
;-)