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Assesses possibilities for large-scale rationalization of NATO's defense posture as the only viable answer to the defense resource bind created by the rising cost of modern forces in a period of severely constrained defense budgets and manpower. Recommends strict priorities and a NATO-monitored matrix approach. Advances numerous specific options, especially in the following key areas: (1) initial ground/air defense against a WP blitzkrieg must get top priority; (2) how to cut marginal national forces and overhead to free resources for trade-off; (3) how to streamline NATO ground, air, and naval forces to reduce manpower costs and free funds for greater readiness and modern equipment; (4) how to place new emphasis on well-trained and quickly mobilizable reserve forces; (5) how to get more flexible use of air power; (6) how to get more interoperability and compatibility of forces,

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