The fall of its military rival, the Soviet Union, in 1989 allowed the United States to significantly reduce its defense spending in subsequent years. Using the data in the following table from the Economic Report of the President, replicate Figure 17-2 for the 1990€“2000 period. Given the strong economic growth in the United States during the late 1990s, why would a Keynesian see the reduction in defense spending during the 1990s as a good thing?

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Budget de ficit (percent of GDP) Unemployment rate Year 1990 3.9% 5.6% 1991 4.5 6.8 1992 4.7 7.5 1993 3.9 6.9 1994 2.9 6.1 1995 2.2 5.6 1996 1.4 5.4 1997 0.3 4.9 1998 -0.8 4.5 1999 -1.4 4.2 2000 -2.4 4.0