December 9, 2010

$1 Trillion: Not Enough for a World Empire

The American Enterprise Institute (AEI), Foreign Policy Initiative, and Heritage Foundation argue in a joint press release that, although many of us are “rightly concerned about the bloated size of the Federal budget,” we must resist the temptation to cut defense spending. The three think tanks proceed to criticize a task force headed by Pete Domenici and Alice Rivlin which called for “a freeze on defense spending and Pentagon cuts that would take the military’s budget down to 2000 levels.” As AEI et al. argue:

Pentagon spending is a drop in the bucket of the government’s $13.3 trillion debt. As Secretary Gates pointed out recently, “If you cut the defense budget by 10 percent, which would be catastrophic in terms of force structure, that’s [only] $55 billion on a $1.4 trillion deficit.”

As many of you no doubt realize, the numbers the think tanks cite here are misleading. Although the “base defense budget” is “only” around $500 billion a year (2009 numbers), when you add the wars in Afghanistan and Iraq (which are “largely funded through supplementary spending bills outside the Federal Budget”), the defense budget swells to around $650 billion.

Moreover, as economist Robert Higgs points out, the government hides much of its defense-related spending in other departments. So, for example, our nuclear weapons program is funded by the Department of Energy, veterans’ benefits by the Department of Veterans Affairs, the Military Retirement Fund by the Department of Treasury. When you add all these expenses into the defense budget, it turns out that we’re spending over $1 trillion a year.

And we’ve been spending massive amounts on defense for some time now. So it’s simply false to claim that defense spending is “a drop in the bucket of the government’s $13.3 trillion debt.” And it’s equally false to claim that cutting the defense budget by 10 percent would only save $55 billion, for 10 percent of $1 trillion is not $55 billion but $100 billion. (This, of course, still isn’t enough, which is why it’d make more sense to start by cutting the defense budget by, say, 50 percent, which would result in $500 billion in savings.)
AEI et al. continue:

There is a common misconception that the military has enjoyed ballooning budgets since the beginning of the decade. In reality, the baseline defense budget (not including the costs of the wars) grew from only 3 to 3.5 percent of GDP from the end of the Clinton administration to the time George W. Bush left office, delaying modernization and procurement efforts across all the armed services.

But defense spending has been ballooning for several years now. Even a recent Heritage Foundation report conceded that defense spending nearly doubled from 2000-2010. Indeed the US currently spends more on defense than it did at any point during the Cold War.

It makes no difference that the base defense budget is “only” 3.5 percent of GDP. The bottom line is that we’re spending far beyond our means and that defense accounts for 32 percent of our total spending. When you subtract Social Security from the budget, which, as Ismael Hossein-zadeh writes, should be subtracted given that it’s a trust fund, defense accounts for around 40 percent of total spending.

AEI et al. go on to warn of the perils of cutting defense spending, telling us that doing so “would seriously undermine America’s ability to meet the emerging security challenges of the twenty first century.” The way they talk, you’d think that the Cold War hadn’t ended and that we were still at war with the Soviet Union with its tens of thousands of nuclear warheads. The truth, as Stephen Walt writes, is that, “although perfect security is beyond anyone’s grasp, the United States is as secure as any state could ever expect to be.” He explains:

The U.S. economy is still the world’s largest and most diverse, despite its recent woes, and it is still more than twice as large as the number 2 and number 3 economic powers (China and Japan). We spend more on national security than the rest of the world put together, are the only state with global power projection capabilities, and have the world’s most sophisticated nuclear arsenal. Many of the world’s significant military powers are our allies, so our actual lead is even greater. There are no major powers near to our shores, and we are insulated from many global problems by two enormous oceanic moats.

The United States does face a modest problem from terrorist groups like Al Qaeda [which, according to Obama, remains the greatest threat to national security], but that is due in good part to our own ill-advised meddling in the Middle East and elsewhere. And assuming it never acquires a nuclear weapon (which we can prevent by working with others to enhance nuclear security around the world), Al Qaeda is not an existential threat to our prosperity or way of life. Even if all their thwarted plots had succeeded—and I’m very glad they didn’t—the damage would pale in comparison to the costs of the Iraq and Afghanistan wars. Indeed, if history is any guide, international terrorism at its worst poses less threat to American life than auto accidents, nut allergies, or falling in a bathtub.

Now I imagine that the AEI crowd would, at least secretly, concede Walt’s point. It should be beyond dispute that we don’t need to continue spending $1 trillion a year to protect ourselves from foreign enemies. But protecting ourselves from foreign enemies has never been the goal of the AEI crowd.

Rather, its goal has been prolonging the American Empire. It’s not enough to keep Americans safe. It wants to rule the world. It wants to keep a foothold in the oil-rich Middle East and Central Asia. It wants to keep its 1,000-plus overseas military bases, which can be found in Germany, Japan, Guam, Greenland, the Netherlands, Portugal, Bulgaria, Brazil, Spain, Diego Garcia, the Philippines, and many other countries. And, of course, above all, it wants to keep the money flowing to its friends at Lockheed Martin and Boeing.

That’s the goal of the AEI crowd. To rule the world and its resources. And to accomplish that they certainly need more than $1 trillion a year.

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