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Most Western assessments of the Soviet Military threat depend critically on the accuracy of the CIA’s direct cost estimates of Soviet arms expenditures. These estimates not only measure the cost of Soviet defense programs, they also provide essential information on the real rate of Soviet procurement growth. The Central Intelligence Agency’s estimates in this way serve as a summary indicator of the aggregate annual improvement in the quantity and quality of Soviet weaponry.
In this explosive, expanded assessment of the CIA’s military costing techniques, Steven Rosefielde shows that the CIA continues to dangerously underestimate the Soviet arms buildup. Rosefielde breaks out the CIA’s direct costing methods into its component procedures and assumptions, and then applies econometric methods to test their empirical and logical validity. In doing so, he demonstrates how a fundamental methodological error has led to decades of falsely estimating the Soviet Union’s military investment patterns. He argues forcefully that the CIA’s optimistic conclusion that the Soviet threat has been checked is greatly exaggerated.