When you change your government you lose a percentage of your country. This makes sense. A revolution takes place and fluff gets fluffed up!
When you change your percentages of military though you automatically start making that much. Realistically you would have to change your infrastructure around to build the different aspects of your military.
Why is there no penalty for changing what military you build?

Because pretty much everyone that isn't a commie sets production to 100% spies and lets it sit there.

except elves

he goes 48% spies 47% troops 1% jets, 1% turrets, 3% tanks

...he claims it's some special code