ABSTRACT
The US foreign military sales (FMS) program has beneficial implications for the US economy in terms of both the domestic income and employment generated either directly or indirectly. These benefits stem from US Government disbursements: funds paid to US firms for equipment acquired by the US Government to meet obligations entered into with other countries through government-to-government military sales agreements under the FMS program. The total income associated with FMS disbursements varies among states as a function of differences in local economies. A Bureau of Labor Statistics study tends to corroborate the upper end of the Defense Security Assistance Agency estimates. The chapter examines the employment associated with FMS for the period FY1972-FY1979. Not surprisingly, the employment generated by FMS disbursements is not evenly distributed across industries. In considering the impact of fluctuations in the FMS program, caution must be exercised in interpreting the likely implications for both income and employment.
