Sunday, February 22, 2009

Reaping dividends from our military investment

Over the last eight years, it's clear the one area of government that has seen significant spending increases has been the military. Official military spending in the budget stands at around $500 Billion. "Emergency" spending for the operations in Iraq and Afghanistan tends to consume another $200 Billion or so each year. This represents the most significant single investment the government makes each year. So the question is how do we use dividends from this investment to help us out in our current recession?

Obviously, the biggest dividend that military spending pays is providing a secure environment back home for economic activity to take place. But given the massive size of what we've spent in the last eight years, maybe we need to start getting a little more creative in how we collect dividends from this investment.

The most obvious way would be to simply start cutting back on this spending. We spend as much on the military as the rest of the countries of the world COMBINED. Clearly, we can afford to cut back significantly and still have by far the most powerful military on earth. While it's true we have operations in Iraq and Afghanistan that can't simply be stopped overnight without dire consequences, we have countless operations throughout the world that aren't nearly so necessary. Are we concerned that Germany is about to embark on another conquest to take over the world? Or Japan? What about the dozens of other countries where we maintain bases? If we pull out of Poland, for example, are there really going to be dire consequences for us, the world, or even Poland? How much could we save, and divert to more productive ends, if we shut down overseas bases that aren't absolutely vital to active military operations?

I don't know the answer to how much we could save, but I have an idea for how to get an estimate. The Department of Homeland Security operates on a budget of about $40 Billion. Now think for a second about what the DHS actually does. The DHS essentially performs the only function outlined for the military in the Constitution: defending the nation and its borders. The traditional branches of the military have strayed so far from the Constitutionally defined mission of national defense that we've been forced to create an entirely new government department to do the job. It seems by focusing military resources on defending the homeland rather than building a global American empire, we could cut hundreds of billions out of the federal budget. If we simply redeployed troops to either active war zones or within US territory, we would have a surplus of soldier and could stop recruiting for years. By redeploying our equipment in the same way, we could stop procuring additional equipment for several years.

The true cynic in me wonders if there's the potential to go even further. We've spent trillions on weapons that, in many cases, have no application in our current military operations. Could we make an effort to identify potential markets for these weapons? I'm thinking nations with large, belligerent neighbors that threaten their security. The world seems to have no shortage of such situations. How much could we make by arming weaker neighbors? If done strategically, it seems like such an approach could paradoxically lead to greater peace by making it less appealing for powerful nations to pick on their weak neighbors. Of course, the easiest, but least likely, example would be Palestine. While Palestine is guilty of killing 3-4 Israelis a year with its hostile actions (source: The Economist), Palestine suffers hundreds, if not thousands, of casualties from its more powerful neighbor. A well-armed Palestine would be better able to deter massive invasions by Israel like the one they just experienced. And if Palestine didn't feel so utterly impotent, they might even stop the guerrilla rocket attacks that are currently the only outlet to vent frustrations. Maybe some of Palestine's oil-rich allies would be willing to loan them the cash? Alright, my utterly cynical side is done.

The point is if we're ever going to restore fiscal sanity to our national government, the most obvious place to start is reigning in military spending. We spend twice as much as a percentage of our GDP than just about any other developed nation. And if there's ever been a program that defines the notion of a wasteful black hole in the budget, the military has to be it. Clearly, the more we spend on developing and maintaining a military presence around the world, the more we need to spend in subsequent years. This is because our very presence around the globe provokes resentment and hostility from people who don't like the presence of foreign powers in their nation. (Really, why should this be questioned? Would Americans tolerate the presence of French bases within our borders? And the French aren't all that different from us or hostile to our interests. How would we react to a Cuban base on our land?) This resentment and hostility eventually leads to action against our military (or at least the presence of our military) and this requires us to devote additional resources to battling back.

At least when we spend on things like NASA or National Parks or Medicaid, we don't create such non-negotiable requirements for additional spending. People may decide they like those programs and want more spent on them, but people do not attack their presence in a way that necessitates exponentially increasing spending just to maintain status quo. But this is what we face when attempting to maintain a global military presence. It's time to end this game of diminishing returns. Let's take our existing investment and redeploy as much of it as possible to supporting the core mission of the military. This reallocation should allow us to drastically cut spending for several years while the existing extraneous assets are reallocated to more vital roles. The spending that is saved can be used to spur economic development, creating future wealth that can be tapped to increase military spending when the need later arises.


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