“If you want total security, go to prison. There you’re fed, clothed, given medical care and so on. The only thing lacking… is freedom.”
– Dwight D. Eisenhower
“Ladies and gentlemen, there is no amount of military force that can possibly give you real security, because you wouldn’t have that amount unless you felt that there was almost a similar amount that could threaten you somewhere in the world,” Eisenhower told reporters early in his Presidency. “Now, you finally have to make certain very tough decisions. I know of no better way to express it than George Washington did, many years ago. He said this country must always be careful to have a reasonable posture of defense.”
With this new conference in March 1953 Eisenhower began the long pursuit of balancing between fiscal responsibility and the proper level of defense for the country during his Presidency. Eisenhower hated waste, and having served in the military most of his career, he knew there were opportunities to save money without risking the safety of the country. He was “dedicated to one idea, which is to get less money spent for overhead and” eliminate “certain duplications and unnecessary expenses, and to get out of that same money more combat strength.” 
Achieving a balanced budget was a priority for Eisenhower, despite the Cold War and despite calls for tax cuts. And since the defense budget was the largest component of the Federal Budget, Eisenhower was determined to get it under control. Unlike many military men of the past, he understood the need to prepare to fight the next war, not the last one.
The game had changed the moment the Soviets tested their first atomic bomb in 1949. He wanted a fresh look at America’s defenses, and established five principles to guide him and his team: when attacked, America did not have to respond “in kind” (e.g. if Europe was invaded with troops, the U.S. did not have to use troops, it could use other weapons); since a nuclear war would be catastrophic, America needed enough strength to deter a conflict; “military and economic strength were intimate and indivisible”; modern armed forces were essential, since we could “no longer afford the folly … of beginning each war with the weapons of the last”; and lastly, the need for alliances since America’s resources were finite. 
It was also necessary to conduct a horizontal analysis — a strategic look across all the services to optimize the allocation and deployment of forces at home and around the world. The guidelines and analysis resulted in Eisenhower’s “New Look” – a defense program which reallocated resources between the armed forces, with a greater reliance“ on the deterrent and destructive power of improved nuclear weapons, better means of delivery, and effective air defense units.” More resources would be moved from the other services to the Air Force, and an overall reduction in conventional services would occur, with the greater emphasis on nuclear deterrence. 
As he expected, Eisenhower received pushback from many quarters, from the Army, the Navy, from Congress on the closing of bases, and even within his own administration. When his Secretary of State John Dulles protested that the priority for a balanced budget would put the country at risk Eisenhower disagreed, once again telling his cabinet that security required a sound economy, which required a balanced budget.
For the rest of his Presidency, Eisenhower stood firm against pressure from the Pentagon, Congress and others to increase defense spending in his goal to achieve the balanced budgets required for a sound economy. In his first Federal Budget for 1955 he was able to reduce overall defense spending from $48.7 billion in 1954 to 44.9 billion. In three of his eight years in office, Eisenhower managed to deliver a small budget surplus (1956, 1957, 1960). The country did go through two recessions during his administration, one he inherited in 1953, and the other in 1957. But overall, the economy thrived under his leadership.
America had the strongest economy in the world in the 1950s. Business and manufacturing thrived, with exports at all time highs, and U.S. GDP grew from $284.6 billion in 1950 to about $500 billion by the end of the decade. The country prospered in large part because of Eisenhower’s leadership and insistence on the proper allocation of resources and fiscal responsibility, especially his resistance to increase defense spending and reducing taxes.
 PP, 31 – The President’s News Conference of March 19th, 1953, http://www.presidency.ucsb.edu
 Eisenhower, Mandate for Change, 446
 Eisenhower, Mandate for Change, 451