How to Save the Global Economy: Cut Defense Spending
Breaking out of the current frustratingly slow growth in the developed world requires a blend of short-term stimulus and longer-term restraint. Unfortunately, in Europe and the United States, we have been following these policies in reverse — constraining public-sector spending in the near term while doing nothing effective to prevent deficits in the future. In ...
Breaking out of the current frustratingly slow growth in the developed world requires a blend of short-term stimulus and longer-term restraint. Unfortunately, in Europe and the United States, we have been following these policies in reverse — constraining public-sector spending in the near term while doing nothing effective to prevent deficits in the future.
In the United States, cuts in public-sector spending have caused the loss of 550,000 public-sector jobs — think teachers, police, and firefighters — since January 2009, adding to the raw unemployment numbers and removing the multiplier effect that takes place when employees spend their paychecks. The result: Despite gaining private-sector jobs every month for the past 21 months as of November, we have been badly hurt by reduced public-sector spending, which has cut jobs and economic growth.
Yet my Republican colleagues have insisted on retaining all of George W. Bush’s tax cuts, thus all but guaranteeing that future revenues will continue to fall far short of what is necessary to reduce U.S. debt and create the conditions for a strong recovery.
One major change that can reverse this: a substantial reduction in America’s military spending. In the current fiscal year, the United States is spending upwards of $650 billion on its military, including the costs of the wars in Iraq and Afghanistan. This is far more than it spends on Medicare and, more importantly, considerably in excess of what is required for America’s legitimate national security needs.
The United States should and will be the strongest country in the world. But it can achieve that status for significantly less than it is now spending. An early withdrawal of U.S. troops from Afghanistan over the next six months would save hundreds of billions of dollars. In addition, we could reach savings of more than $100 billion annually by adopting strategic concepts appropriate to the current world situation, rather than continuing to rack up bills fighting threats that no longer exist. We could also save tens of billions of dollars a year by curtailing our commitment to the defense of Western Europe — which was perfectly sensible when President Harry Truman made it but is wholly inexplicable now that Europeans are wealthy, strong, and threatened by no one — as well as by reducing our military presence in Japan and forgoing the new proposal for stationing U.S. Marines in Australia. We do not need to maintain the fighting capacity we had during the height of the Cold War to engage the Soviet Union in an all-out conflict. Terrorists are terrible people who should be confronted, but they are not a thermonuclear-armed Soviet empire. Fighting them, though in many ways more complicated, should be less expensive.
Reducing excessive military spending — my proposal cuts approximately $900 billion in the next 10 years — would allow us to provide the short-term economic stimulus needed to continue the progress we are making in breaking out of the recession. Ironically, many of my conservative colleagues have opposed the idea of reducing our military budget on grounds that I refer to as "weaponized Keynesianism." They claim that government spending doesn’t create jobs — unless it is for the military. Many opponents of cuts in military spending now argue against them not in terms of national defense, but on the grounds that they would cause job losses. In fact, economists tell us, reductions in military spending will have far less negative impact on jobs than comparable reductions in medical care or infrastructure.
If America’s extensive worldwide military engagements were proving effective at bringing stability to troubled countries, I would feel conflicted in noting that these impose a terrible drain on our economy and interfere with what we need to do to resume economic growth. But in fact, such interventions rarely work. Heavily armed young Americans are an excellent fighting force, but a U.S. military presence is rarely the best way to resolve long-standing ethnic, religious, or other social tensions.
If we commit to reducing military spending to a rate of approximately $430 billion a year over the next decade, with suitable inflation adjustments, it would do a great deal to reassure people that we had our deficit problem under control, that the long-term drain this puts on our economy would be diminished, and that we could then afford the near-term economic stimulus we need to help accelerate our currently sluggish growth.
Defense Secretary Leon Panetta recently said further cuts would "hollow out" the U.S. military. This is a surprising complaint from someone who cited the post-Cold War period as one of those times when we "hollowed out" our military — he was, after all, President Bill Clinton’s budget director when the United States reduced military spending in the way he now decries. But Panetta is unfair to his younger self. The reductions in the military budget begun after the collapse of the Soviet Union by President George H.W. Bush and continued by Clinton — along with other spending constraints and tax increases on the wealthy — resulted in balanced budgets in the late 1990s. No one I have spoken to has ever presented any convincing evidence that there was any damage to U.S. national security because of it.
Returning to the sensible defense policies of George H.W. Bush and Bill Clinton would in no way damage America’s security. It would help us get the United States’ job engine going again and revive economic growth around the world. Let’s bring the troops home.