Myths of Defense Spending

As you can see by the title, I've chosen to write about defense spending this week. I hope it's not too dry and boring. I concede it might appear that way, but when you think about what a life-or-death matter it is, it gains some significance, so I want to contextualize it a little before diving in.

One thing that I've been thinking about is the extent to which I myself, and probably most Americans, take our primacy on the world stage for granted. I think it is only human to project one's experiences of the present and recent past onto the future. So we tell ourselves, "As long as I've been alive, America has been secure in its position as a military and economic superpower. It's inconceivable that would ever change." And yet, history is full of examples of empires and great nations rising and falling. Are we so different? Before America, Great Britain was in many ways the world's foremost power. The Royal Navy ruled the waves, much like the U.S. Navy does today. Now, Great Britain has slid far, very far, from the exalted status it once enjoyed. Two world wars won at great cost plus decades of failed socialist policies will do that to a country. The transition from British world leadership to American world leadership was mostly benign (at least for America). If America were to abdicate its role as the leader of the world, who would now step in? Russia? China? The European Union?

Of course, there are those in America who believe America should not be an exceptional country. They would rather have America be just like any other country. Frankly, American power bothers them. Obama's own words and actions identify him as a member of that group. I'll save the question of the appropriateness of America's role on the world stage for another time. In the meantime, taking it as a given that America is the world's sole superpower, how is that role to be maintained in the absence of sufficient military power? Adequate defense spending is key to maintaining America's role in the world.

So, to finally get around to what I want to write about today. (Come on, you all know me, and know that I can't say anything without taking an hour to say it.) We are now at a time where there is much focus on government spending, and rightfully so. The current trends in spending are absolutely unsustainable. As often happens, defense spending has become somewhat of a whipping boy in the whole debate. Obama has already made cuts in defense and his proposed budgets contain further cuts that would move the defense budget towards a historic low, even as the military continues its global fight against terrorists. So I'd like to dedicate this post to quickly dispelling two myths about defense spending that I often hear used in justification of cutting defense spending.

Myth#1: Defense spending eats up most of the federal budget and is the primary factor driving the country towards bankruptcy.

We've all heard it time and again in the media and in conversation and it usually goes something like this: "If only we spent less on the military we would have (fill in the blank with whatever the speaker's preference happens to be: awesome schools, better roads, a stronger social safety net)." In fact, nearly half of Americans have said they believe defense spending represents the largest area of spending. This is completely
false.

In fact, according to the Congressional Budget Office, defense spending accounted for a fifth of federal spending in 2009. That's right: one-fifth. The federal government spends more on Social Security and Medicare and welfare than it does on defense. In addition to that, defense spending is trending downward as a percentage of GDP, while entitlement costs (Social Security, Medicare and Medicaid) are exploding and are going to eat up the entire budget all by themselves within a couple decades. Add to that the fact that interest payments on our debt alone are supposed to overtake defense spending by 2015, and you start to realize how ridiculous it is that some people think that our spending situation would be just fine if we'd only stop fighting wars and cut the military down to size. The following charts from the Heritage Foundation help visualize the issue:

Myth#2: U.S. defense spending is excessive compared to the rest of the world.

Like many myths, this one does contain some truth. The U.S. does spend vastly more money as an absolute measure than any other country in the world. (Although, when viewed as a percentage of GDP, U.S. spending seems much less exceptional) This fact is used to make it seem the U.S., by virtue of spending so much, must be an aggressive, war-mongering power. Or alternatively, some may argue that this shows how the U.S. is paranoid, and no other country could possibly threaten us, and so we could cut our defense spending by 50% and suffer no adverse effects. Lastly, some see in this fact the specter of the military-industrial complex run amok, with corrupt politicians and defense contractors driving spending way beyond any reasonable level.

Ultimately, this comes down to your world outlook. If, like the group I mentioned earlier, you are one of those Americans uncomfortable with America's role, then yes, I suppose America does spend too much on its military relative to the world.

I would argue that defense spending doesn't occur in a vacuum. Each country has its own distinct interests and circumstances and shapes its defense policy accordingly. Regardless of what one may wish for, America in its current role is the guarantor of peace and stability for much of the world. The E.U., Japan, South Korea, and many, many other countries, rely on the American military to protect them.

The U.S. Navy patrols the sea lanes upon which so much of the world's trade travels, which leaves other nations free to skimp on their own navies, secure in the knowledge that the seas are safe. This is what is known in economics as the "free-rider" problem. Because the U.S. picks up the tab for so much of the world's security, those countries can enjoy the benefits of security without contributing to the cost of providing it. So when you compare the numbers on defense spending, you have to factor in that those numbers would be a whole lot higher in the absence of American leadership in world security. (An interesting example of this going on right now is the growing arms race in the Far East as Japan, South Korea, and others adjust to a growing, more assertive China and Russia, and a retreating America.)

The U.S. also sells many weapons systems to allied militaries around the globe. This has the benefit of strengthening our allies and solidifying our ties with them, but it also means that we usually bear the cost of research and development alone, again, helping other countries to save money.

Finally, we have been living for a long time on past investments. What I mean is, our ships, tanks, guns, and planes almost all date from the Cold War when we spent much more on defense (just look again at the charts). The military has done a great job of refitting and updating all these weapons to keep them up-to-date, but at some point you just can't pour any more new wine into old vessels. All the while, competitors are developing new planes, ships, etc., often at much faster rates than anticipated. Absent some major investment in new weapons, our continued dominance is very doubtful. Also at play is the fact that many competitors turn to asymmetric warfare as a strategy to counter America. For example, China may not be able to send carrier battlegroups around the world like we can, but with their new anti-ship cruise missiles they may be able to keep our carrier battlegroups out of their neighborhood, and to them, that's enough. Likewise, insurgents may not have tanks and armored vehicles, but they can use cheap bombs to blow up ours. So there are many potential, relatively cheap, countermeasures out there for our enemies.

So the moral of all this to me is: American defense spending is exceptional because the American military plays an exceptional role in the world.

Thanks for reading and please, let me know your thoughts on the matter!

P.S. Some of you told me you had problems trying to post comments, but I've fixed the settings, so it should work now. No more excuses!