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The Cost of Empire

Last week, Congress approved the 2010 Defense Authorization Bill, with costs totalling to a whopping $680 billion. And as Christopher Preble points out, that’s not all:

The defense bill represents only part of our military spending. The appropriations bill moving through Congress governing veterans affairs, military construction and other agencies totals $133 billion, while the massive Department of Homeland Security budget weighs in at $42.8 billion. This comprises the visible balance of what Americans spend on our national security, loosely defined. Then there is the approximately $16 billion tucked away in the Energy Department’s budget, money dedicated to the care and maintenance of the country’s huge nuclear arsenal.

All told, every man, woman and child in the United States will spend more than $2,700 on these programs and agencies next year. By way of comparison, the average Japanese spends less than $330; the average German about $520; China’s per capita spending is less than $100.

And don’t forget that national security spending also contributes to our growing budget deficits. In Fiscal Year 2009, the United States spent approximately $383 billion on interest payments to service the debt (by way of comparison, that’s about 7.5 times NASA’s budget). As we continue to allow national security spending to go unchecked, those numbers are only going to get worse.

The amount of money being poured into national security spending is completely irresponsible and unsustainable. We can’t afford it. As we (hopefully) wind down the wars in Iraq and Afghanistan, we need to take a real hard look at our foreign policy–particularly why we feel the need to spend more on defense than the rest of the world does combined. There’s no reason why we can’t adopt a more restrained policy and still keep the United States secure. I mean, let’s put this in perspective. We could cut DOD appropriations in half, today, and we’d be spending more on defense than all of the EU nations combined.

We need to move to a more responsible course.

(cross posted to Heretical Ideas)

Update: Just to be clear, I wouldn’t advocate cutting the defense budget in half today. I merely wanted to illustrate that cutting DOD appropriatons in half from $680 billion to $340 billion would still result in the U.S. spending more than the EU on the military. I do think that a 50% cut from current levels is feasible, but it would have to be phased in long term–15 years or so–to be at all workable.

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About Alex Knapp
Alex Knapp writes about pretty much everything under the sun, including politics, art, religion, philosophy, sports, music, culture, and science.

Comments

  1. Dave Schuler says:

    I agree with Alex that our defense spending should be more prudent and that probably means cuts. How far should we cut our defense spending and what will the implications of that be?

    Arguendo, let’s say we cut our spending in half. The deficit is well over a trillion dollars. Large as it is $300 billion is less than a trillion.

    To place these numbers in perspective we should recall that 2010 outlays for Social Security are expected to be $701 billion (that doesn’t include the cost of administration, another $12 billion or so). Medicare outlays are projected to be over $500 billion. Medicaid outlays are around $300 billion. And total education spending (local, state, federal) tops $1 trillion.

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  2. Our Paul says:

    Do believe President Eisenhower coined the phrase military industrial complex (never to be capitalized), which you somehow overlooked.

    Military industrial security complex any one?

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  3. Alex Knapp says:

    Dave,

    Using 2009 or even 2010 isn’t that great a baseline for the deficit considering there are a lot of one-time expenditures in both years. The projected 2011 CBO projected deficit is a about $600 billion, so let’s start there.

    The rest of your points are sound, though.

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  4. Dave Schuler says:

    $300 billion is less than $600 billion, too. And IMO cutting the defense budget in half is probably politically impossible even if it’s sound policy, not completely assured.

    Again referring back to the recent post at my place, I think that globalization, particularly in a broad sense which includes not only free seas but free trade, capital flows, and information flows, continues to be a sound policy and one by which the U. S. has benefited greatly. It might be the case that the $600 billion is well worth it. I genuinely don’t know but I think it’s worth discussing.

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  5. odograph says:

    We have a great word in software engineering: Refactoring.

    The idea is that you look at an existing system, discover what it is really doing, and then find a way to do it more efficiently.

    … no matter where you are on the political compass, you should agree that changes to federal law have been too often additions. It brings to mind the worlds largest ball of twine.

    It would be nice to refactor defense. Unfortunately, if the health care debate serves as a model, we can still only do additions. Refactoring is “too hard.”

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  6. odograph says:

    I think that globalization, particularly in a broad sense which includes not only free seas but free trade, capital flows, and information flows, continues to be a sound policy and one by which the U. S. has benefited greatly. It might be the case that the $600 billion is well worth it. I genuinely don’t know but I think it’s worth discussing.

    Did you engage at all with the stall (and recent decline) in middle class income, or the possibility of high structural unemployment going forward?

    I am not whatshisname, the movie maker, but I think there is data that just stares us in the face. Yes, GDP has risen with trade. Unfortunately debt has risen concurrently. As wages fell. As middle class financial resilience was lost.

    That isn’t even commentary. That’s the data.

    There is argument in fact that globalization growth can be explained as debt growth. That would be the commentary … and it may not be wrong.

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  7. Why not cut the Stimulus plan in half first? Why, that’s even more than $300B in savings and will have zero impact on national security. IIRC, military spending as a percentage of GDP is relatively low post WWII, though I’ll have to check that to be sure.

    What about the VA? Are you including that in your 50% cut? Really, the Pollyannish let’s cut the defense budget in half is just silly. How about cutting all government across the board by 2% a year for the next five years as a start? Much more practical and spreads the pain in a more manageable and equitable manner.

    Anyway, I question one of your assumptions. We aren’t paying so much for national security, but for international security, and that is an entirely different argument. Sitting secure behind our borders and watching the world burn isn’t all that enticing. Sure I’d like to see everyone else pony up for their share of international policing, but I’m not going to hold my breath. Pulling back now would seem to run counter to the COIN strategies that are all the rage in smaller theaters of operation, but YMMV.

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  8. odograph says:

    BTW Alex, shouldn’t this be “the cost of non-empire?”

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  9. Alex Knapp says:

    Why not cut the Stimulus plan in half first? Why, that’s even more than $300B in savings and will have zero impact on national security.

    That would just be a one time deal.

    IIRC, military spending as a percentage of GDP is relatively low post WWII, though I’ll have to check that to be sure.

    Why is that a relevant figure?

    What about the VA? Are you including that in your 50% cut?

    No. Just pure DOD appropriations.

    Anyway, I question one of your assumptions. We aren’t paying so much for national security, but for international security, and that is an entirely different argument.

    Like what? Destabilizing Iraq and making it a haven for terrorism? Sending troops in after drug dealers in Colombia? Stationing troops in over 100 countries for vaguely defined purposes? Do these really do anything to improve security?

    Sitting secure behind our borders and watching the world burn isn’t all that enticing.

    That’s a pretty unjustified leap in logic. Do you mean to say that Germany would try to invade Poland if we pulled our thousands of troops out of both countries?

    Pulling back now would seem to run counter to the COIN strategies that are all the rage in smaller theaters of operation, but YMMV.

    Given that those operations are manifest failures, that doesn’t seem like a bad idea to me.

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  10. Steve Plunk says:

    Charles, as usual, is correct. Good budgeting policy is about slowing growth or making small cuts over time. Cutting the defense budget in half would have a series of unintended consequences likely to cause economic disruptions. The disruptions of foreign policy policy around the world are a whole different problem.

    I agree cuts are necessary but slowly and with a deliberate plan.

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  11. Alex Knapp says:

    Steve,

    See my update above. I wasn’t trying to say that we should make drastic cuts today–they should definitely be phased in slowly.

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  12. steve says:

    “I agree cuts are necessary but slowly and with a deliberate plan.”

    For whom would you vote to achieve this? Neither political party has shown an inclination to cut budgets. At some point we have to go to economic war with the parties we have, not the parties we wish we had.

    Steve

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  13. Why don’t we decide what we intend to do with our forces, what missions we expect them to take on. And then see how much that costs?

    The key debate is about grand strategy. Have that debate and we may find we need more, less, or just what we have now.

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  14. odograph says:

    I don’t know if you guys follow the econ blogs, but one thread across them today is how bad things would look without the combination of TARP, Cash For Clunkers, and Homebuyer’s credit.

    I actually dislike all those things too, but the numbers don’t look great for cutting them now.

    You know, I mentioned charge-off rate to you guys starting some time back. Now:

    The 2008-2009 recession hasn’t been anywhere near as deep as the Great Depression in most measures. We already knew trade was looking worse this time around, and now Moody’s points to another metric: loan charge offs.

    The ratings agency notes that U.S. banks has incurred $45 billion of loan charge-offs collectively in the third quarter and $116 billion in the year to date. “Charge-offs year-to-date imply an annualized rate of 2.9%. For the third quarter, they translate into an annualized rate of approximately 3.4%. By both these measures, the current pace of charge-offs exceeds the early years of the Great Depression, as illustrated in the chart below. Annual charge-offs hit 2.25% in 1932 before peaking at 3.4% in 1934,” Moody’s said.

    I think this DOES have something to do with the costs of our non-empire (and globalization).

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  15. Wayne says:

    Eliminate a good deal of the bureaucracy in military procurement and the cost efficiency would go way up. It won’t happen of course. Demanding the best and latest high tech equipment for all and not just the one who need it, smartest high tech bombs, and a perfect military cost money. Demanding all those things and more on one hand then complaining about the cost is asinine.

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  16. Duracomm says:

    Analysis of this type need to factor in the positive impacts of the defense spending.

    For example europe and japan free loads on US military strength. That is not necessarily a bad thing as the 20th century provides a couple of examples (WW 1 and WW 2)of just how dangerous large standing armies in Europe and Japan can be.

    And the US military keeps shipping lanes open, another positive economic benefit that is not accounted for when looking at military costs.

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  17. Duracomm says:

    The root cause of the budget problem is entitlement spending.

    Defense spending has been already been cut substantially from the 1950s level while entitlement spending continues to explode.

    The Stubborn Welfare State

    In 1956, defense dominated the budget; the Cold War buildup was in full swing. The welfare state, which is what “payments to individuals” signifies, was modest.

    Now everything is reversed.

    Despite the war in Iraq, defense spending is only a fifth of the budget; so-called entitlement payments to individuals are almost 60 percent — and rising.

    The amount of money being poured into entitlement spending is completely irresponsible and unsustainable. We can’t afford it.

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  18. Duracomm:

    This is like a husband-wife argument where he thinks the problem is her spending on clothes and she thinks the problem is his spending on Scotch. If you don’t have the money then every dollar, wherever it’s spent, is the problem.

    Defense needs to be looked at in light of just what the hell we think we’re doing with it.

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  19. andrew says:

    5% of GDP on defense spending is completely justified and easily sustainable. Kind of funny how that’s the only part of the budget the Left ever wants to cut.

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  20. Dave Schuler says:

    This is like a husband-wife argument where he thinks the problem is her spending on clothes and she thinks the problem is his spending on Scotch.

    This has the ring of truth to me—I presume this is from personal experience. 😉

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  21. Dave:

    There have been certain suggestions to the effect that $50 Scotch is not entirely necessary.

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  22. Eric Florack says:

    Anyway, I question one of your assumptions. We aren’t paying so much for national security, but for international security, and that is an entirely different argument.

    Charles;

    With respect, that depends on how you reckon it.

    If your argument is to be that incidents and political fights in smaller countries cannot really affect us and our security here in the States..(And I would include Financial stability issues in the description of the word, “security” ) then I give you 9/11, and the other attacks on American interests by 14th century throwbacks.

    Now, argue if you will that had we focused on national security.. IE: Border security, 9/11 might not have happened, I’ll agree. Then again, world trade and our status as a (arguably) free society, and the financial wellbeing that come from each would suffer were we to invoke the kind of security measures needed, if such measures cold ever be accomplished at ANY price.

    Would, for example we have been able to deal with Germany AND Japan at our borders, in perpetuity, once all the other countries had either fallen under their sphere of influence, or been bombed flat trying to resist?

    What I’m suggesting to you is that a stable world, ….and thereby a stable world economy… is very much a part of our own national security.

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  23. DL says:

    Cutting defense for the sake of economics might just be like that coffee throwing guy in the post above, not having anything but coffee to fight with.When you’re the family’s biggest brother its your job to stop the bully next door. No one wants the job, but the results from cowering are loss of everything to those that will spend the bucks on getting control of your freedom. If we can buy GM, and veal birthday cakes for Obama’s dog,we can police the world. One way would be to get some production out of that 50% who aren’t presently paying taxes.

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  24. Say, whatever happened to the peace dividend? Down the drain with the holiday from history I guess.

    Alex, you are cherry picking and avoiding the serious international issues that would arise if the US stopped being the world’s policeman. I have no problem with anyone arguing that we shouldn’t be, but that’s a different argument that you’re not making. And why don’t you respond to my suggestion to cut federal spending across the board by 2% a year for the next five years. At some point, fiscal displine is needed, rather than spend, spend, spend, no matter what happens on the revenue side.

    odograph, I gather you’re buying the whole jobs saved or created nonsense. Funny how divergence from the plan is so easily explained away if you are a true believer. You go, um, you know.

    steve, I agree. As an aside to my wife recently I exclaimed, “What, you think the Republicans are going to save us?”

    Wayne, as someone who was intimately involved with federal procurement practices for military and intelligence programs, the cause of this bureaucratic waste is …, wait for it …, the United States Congress. Pick up the FAR if you want to have a serious discussion about this. It all sounds good but is a lot harder than you think. The amount of waste is really easy to rant and rave aboiut, but there isn’t as much as you believe — especially without the benefit of hindsight.

    Duracomm, indeed. The Somali pirates are just a foretaste of the US not policing the world. Sadly, I don’t have an answer to this humungous free rider problem.

    Michael Reynolds, not really a good analogy. The government right now is doing about four pounds of butter for every pound of guns. Like Willie Sutton said, you gotta go where the money is and it isn’t defense spending that’s busting the budget. For fun, read the Fiscal Year 2010 Budget Overview Document
    titled “A New Era of Responsibility.” Apparently truth in advertising doesn’t apply to the most ethical, transparent administration in history.

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  25. Dave Schuler says:

    There have been certain suggestions to the effect that $50 Scotch is not entirely necessary.

    To which my wife responded “That’s crazy talk!”

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  26. An Interested Party says:

    Cutting the defense budget in half would have a series of unintended consequences likely to cause economic disruptions. The disruptions of foreign policy policy around the world are a whole different problem.

    Oh, do tell…

    One way would be to get some production out of that 50% who aren’t presently paying taxes.

    Who exactly are all these people who supposedly pay no taxes?

    By the way, does anyone seriously believe that if we pulled all or most of our troops out of Japan and Germany that those two countries would become military powers who would become belligerent towards their neighbors? I thought we were in the 21st century, not the 20th or 19th…talk about wanting to fight the last war…

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  27. By the way, does anyone seriously believe that if we pulled all or most of our troops out of Japan and Germany that those two countries would become military powers who would become belligerent towards their neighbors? I thought we were in the 21st century, not the 20th or 19th…talk about wanting to fight the last war…

    Just curious, but are you just trying to provoke a response? US troops haven’t been in Germany or Japan explicitly to prevent them from rising up again for a long, long time.

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  28. Brett says:

    Why don’t we decide what we intend to do with our forces, what missions we expect them to take on. And then see how much that costs?

    The key debate is about grand strategy. Have that debate and we may find we need more, less, or just what we have now.

    This is spot on. We really need a solid debate about the entirety of our Grand Strategy, and if we want to drastically cut defense expenditures, then we need to re-define our strategic objectives. If we didn’t really care about being able to fight an extended land war, for example, we could gut the Army, and focus more heavily on the Navy and Naval Aviation.

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  29. IMHO, it seems slanderous to call America an empire if the intent is to declare her actions and intent on the same level as the Soviet Unions’ empire in the past, the Russian’s empire now, China’s empire in the past and now, Japan’s empire leading up to WWII,etc., especially considering the fondness so many have for benevolent despotism as their most preferred form of government.

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  30. Alex Knapp says:

    Charles,

    Alex, you are cherry picking

    Wait a minute–using Iraq and Columbia, two of America’s most signficant military interventions of the past decade–is cherry picking?

    and avoiding the serious international issues that would arise if the US stopped being the world’s policeman.

    Like what?

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  31. Alex Knapp says:

    Intent is irrelevant. You know what the road to hell is paved with, right?

    The willingness to, absent any attack on the sovereign territory of the United States, declare war on another nation with the goal of replacing its government with one that is more in line with what Washington wants is imperialistic regardless the nature of the overthrown government.

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  32. Alex, it isn’t the direct interventions that bear on the US no longer being the world’s policeman but the things that don’t happen because we are on the beat that merit discussion. I realize this is a difficult metric, but how many folks here are happy to allow the administration to speak of jobs created or saved but unwilling to allow me to let the US credit for preventing a lot of bad stuff from happening?

    As to what bad stuff, well, there’s always piracy on the high seas, and the fact that the US seems to be the sole serious deterrent to North Korea’s export of nuclear technology and threatening of South Korea; Iran’s attempt to develop nuclear technology, wreak havoc in Lebanon with Hizbollah, and threaten shipping in the Arabian Gulf; China’s territorial land grabs in Tibet and potentially Taiwan; the Russian attempts to rebuild the old Soviet Union empire; various Middle east kerfluffles — especially those involving Israel; and Venezuela doing its worst to destabilize Central and South America — especially Columbia; to name but a few off the top of my head.

    And, of course, there are the humanitarian missions that the US — and only the US — supports around the world, e.g., after the Christmas weekend tsunami in Southeast Asia, just because we’re so damn imperialist by nature.

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  33. odograph says:

    odograph, I gather you’re buying the whole jobs saved or created nonsense. Funny how divergence from the plan is so easily explained away if you are a true believer. You go, um, you know.

    That is a really odd thing to pull from my comments.

    FWIW, I think that “jobs saved or created” is only nonsense in the sense that anyone can claim to know the number. Of course stimulus, or defense spending, or increased consumer confidence, or anything else that changes the dynamic in a positive way will save jobs and create some jobs.

    Anyone who has a number though, has made a mountain of assumptions to get to there. Macroeconomics isn’t that good.

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  34. odograph says:

    Oh, if you were referring to this:

    I don’t know if you guys follow the econ blogs, but one thread across them today is how bad things would look without the combination of TARP, Cash For Clunkers, and Homebuyer’s credit.

    No, the articles I read this morning did not refer to the “jobs saved” numbers.

    Example:

    In today’s commentary at Gluskin Sheff, David Rosenberg explains, among many other things, the secret to the banking sector’s recent earnings success and the secret to Washington’s ability to continue borrowing mind-boggling sums of money.

    (Some hyperbole but interesting analysis.)

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  35. odograph says:

    Another:

    The question really is how robust is the economy and what is the root of optimism. It comes down to the massive doses of medication that have been applied by Uncle Sam. Unless we want to sustain state capitalism, which is what we had by the way, throughout the 1930s and 1940s, then this unprecedented public sector incursion into the capital market and the economy is going to have to end at some point.

    But when you have a system that continuously extends unemployment insurance, provides subsidies for cars and homes (and the latter is still being considered as an extension at a cost of over $1 billion a month for the taxpaying public) not to mention the credit-boosting initiatives by the Fed and the FHA. The Obama team is now considering a capital infusion into small businesses as a means to bolster employment in this critical part of the economy. Friday’s WSJ also suggests that the Democrats are mulling over tax credits for “additional big ticket items.” Yes, that is true. Despite all the fraud involved in the homebuyer tax credit plan, its extension and indeed expansion is not being discussed in Congress. (100,000 improper claims for the tax credit? Who cares? It’s for a good cause.)

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  36. […] continue to fund this type of extravagance is to approach insanity. I don’t like the term, “the costs of empire” because America isn’t not an empire. The term is both factually and historically inaccurate. […]

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  37. I have up close and personal experience with one of these “small business initiatives” this year. I don’t think I’ve ever seen a worse run, more politicized activity.

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  38. odograph says:

    An interesting new claim today:

    The average combined wages and benefits for federal workers is $120,000!!!!

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  39. sookie says:

    why we feel the need to spend more on defense than the rest of the world does combined.

    And in a few short years we can be equally as proud of our military as the rest of the world is of theirs. /snark

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  40. […] The Cost of Empire (outsidethebeltway.com) […]

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