Well, there's actually a HUGE historical downsizing that happened; this is actually something that really caught people off guard with Russia's invasion of Ukraine - the US MIC is a tiny fraction of the size that it used to be, and honestly isn't prepared to supply a "peer conflict" where two industrial powers are in a stalemate that they can't seem to break, so they're throwing as much ordinance as they can produce at the enemy to try to break through.

Thank god, this also hit the Russians incredibly bad, but yeah; people's perceptions of the production capacity of both countries is wildly, wildly overestimated.

The MIC basically had its budget slashed by ~80% or so after the cold war. Thousands of factories were permanently shuttered, hundreds of companies more or less ceased to exist - sometimes some of their engineers were aqui-hired by other firms, but by and large they just stopped working for the MIC in general.

https://www.youtube.com/watch?v=CqjvTKFufuk

This is what they called the "Peace Dividend"; when the Soviets collapsed, we no longer felt we needed a military that could repel a conventional assault from the Soviet Union (with all 700m citizens, and the heartland of industrial Europe (i.e. Germany, Poland, Czechia) backing them). We just, worst-case, needed to stop Russia and their 140m citizens.

They called it that because it unlocked a huge chunk of the budget that previously went to the MIC. A literal dividend of money.