The political marriage between libertarians and conservatives has been good and bad; one of the bad bits is that it has virtually silenced libertarians on military spending. It's not too much of an exaggeration to say that a substantial portion of the national debt is due directly to insane amounts of military spending. The low-tax mantra from Reagan on cut revenue, but most domestic spending is virtually untouchable. The big lever in government spending is Defense spending, which hovers along a 500 billion dollar range or so. Committing to the lower part of this range over the past few decades would have lowered the debt by several trillion, with little tangible loss along the dimension of national interest.
Persistent hawkishness--often from both parties--has escalated this spending without any concern for tangible military goals. Instead of setting national priorities from the standpoint of military resources, there is a bizarre habit of deciding that tangental world events demand substantial military intervention, and an accompanying large military budget. In a world of balancing coalitions and counterinsurgency, money spent this way ends up being basically counterproductive. Come on, the US is basically a large island; it has no national interests or needs that can't be satisfied on $200 billion a year. This urge to find futuristic robotic combat system and newer classes of enemies is a desperate attempt to remain relevant in a world in which American military capacity is basically not needed. Whatever the possibility of future great-power conflict, economic growth is the best way to prepare for that.
Inter-deparment squabbles between Defense agencies worsens this situation. The implicit agreement among agencies to divy up military pork evenly between them provides billions for the megalomaniac dreams of navy commands who build obsolete navy carriers and air force fighter jocks who are now trying to get the F-22 passed.
Democrats will often go through with this agenda because of their bias for interventionism--the Obama pledge to devote more resources to the "good war" in Afghanistan, posturing on Darfur, etc. We all know where Republicans stand. This is where libertarians really need to stand up. It's not enough to rail against government spending; clearly both the composition and size of government spending matter, and it's far worse to spend hundreds of billions on defense then similar amounts of money on more productive goals. The fact that defense is a broadly acceptable class of government spending for libertarians ignores the fact that marginal spending on the military is basically wasted.
Things aren't going great in India either. The defense budget just spiked 22%--largely a political response after the Mumbai attacks on eve of elections--even as the military can't spend their money, still devote staggering sums to personel and pensions (even the normal government has largely cleaned up their pension obligations, and apparently can't even mount a decent strike against Pakistan. All of this is going on even as India has one of the world's worst budget deficit problems, and is headed to the point where the interest payments on debt alone threatens to overwhelm the budget. That this is happening at all after years high growth in the tax base suggests the degree of financial incompetence of the UPA. I'm still waiting for the political commentators to mention this, instead of going on and on about how the BJP are Hindu nationalist communalists, and the Gandhis are wonderfully progressive.