Dude, no one is arguing that we don't have a mixed economy. What we're saying, correctly, is that a candidate like Sanders is such an avowed and self described socialist that if he had his way, he'd push the pendulum so far to the left that we'd be wildly out of balance and it'd wreck our economy. Which most analysis have shown would happen.
To your last point, defense technology is not 100% publicly funded. Defense companies spend millions of dollars every year in IRAD. Yes, the DOD does fund R&D both internally and to private industry but it's not 100%.
You're also missing the fact that defense R&D and manufacturing is merely supplying and supporting our national armed forces, something that is explicitly called out in the Constitution to be stood up by the Federal Government. It's an actual proscribed job function of DC. Nowhere does it say that it's the Federal Government's responsibility to be everyone's insurance company and health care delivery provider. Healthcare is a good and service that can be, and has been, delivered extremely well by the private sector throughout our history. You cannot deliver a national armed forces via the private sector.