An editorial in the Wall Street Journal makes the point that, in paying for domestic spending, President Obama has a third budget option besides the commonly mentioned ones of inflate/print money and raise taxes: cut defense spending to bring it more in line with European levels. "Over time, the welfare state will defeat the Pentagon here, as it has in Europe," the Journal editorial declares, a touch fatalistically. It's interesting to think about, if you agree with that conclusion, how to invest in it. Short defense contractors? The problem is that all it takes is one big 9/11-style terrorist attack on American soil to send defense spending headed in the other direction. Or a transformative politician like Ronald Reagan.