America’s debt threatens our national security

Willis L. Krumholz

As the coronavirus and the ensuing lockdown hit the American economy, Congress has passed over $2.7 trillion in stimulus funds. This includes subsidized loans to businesses, increased unem-ployment insurance, direct payments to Americans, and funding for hospitals and state and local governments.

As a result, the federal deficit will be at least $3.7 trillion for the fiscal year 2020, because we already were running a $1 trillion deficit before we added the coronavirus stimulus. Now, federal debt held by the public is set to exceed 100 percent of Gross Domestic Product, a level that was only seen during the peak of World War II.

As debt moves higher, the interest costs alone on the debt will begin to overwhelm other government spending. Already by 2023, interest on the debt will exceed the cost of our current defense budget. That’s a huge threat to our national security.

Aside from entitlements, a big driver of our current debt and deficits is our military entanglements overseas. That’s both paradoxical and extremely unfortunate.

Our current defense budget is $740 billion. In real terms, this is higher than when President Ronald Reagan was out-spending the once-mighty Soviet Union. The Soviet Union was an existential threat to the country. It had thousands of nuclear missiles pointed at the United States and was attempting to spread communism across the globe.

Today, the Pentagon budget is as much as the military spending of the next ten countries combined. Much of this money is spent on necessary weapons systems and preparedness for great-power competition. But this being government, there’s also plenty of waste. In fact, the Pentagon is plagued by waste, lost inventory, and accounting issues. Its bureaucracy has never passed an audit and made $35 trillion in accounting adjustments in one year alone.

Aside from all this, much is spent on “overseas contingency operations,” including our presence in Iraq and Afghanistan. This adventurism directly accounts for 10 percent of the $740 billion budget, and probably quite a bit more when indirect costs are factored in.

Afghanistan, where America has been for over 18 years, has cost over $2 trillion, 2,400 American lives lost, and over 20,000 U.S. troops wounded. Some estimates place the cost of America’s War on Terrorism at $6.4 trillion so far.

Aside from the direct fiscal costs of this overseas adventurism, there’s also the opportunity cost of war. These wars take policymakers’ focus off great-power competition, including the rise of China, and arguably reduce the focus on domestic issues that are important to Americans.

Some contend that the current $740 billion budget is a drop in the bucket when it comes to the overall debt and deficit. If we reduced the budget to $600 billion per year, this would only result in a $140 billion deficit reduction, they say.

That’s just not true, and anyone who makes that argument is either being disingenuous or doesn’t know how Washington works. One large political faction prioritizes more defense spending, while the other prioritizes entitlements and discretionary domestic spending. The first faction is willing to give up spending cuts in exchange for the other agreeing to spend more on defense. They come together to make a spending deal by agreeing to spend more on everything.

When it comes to the entitlement black hole, unpaid-for promises America has made on entitlements, stretched out into the future, total up to $70 trillion. When many of the country’s fiscal conservatives prioritize defense spending increases above all else, entitlement reform won’t be achieved until a crisis occurs. Discretionary spending is less of a driver of debt and deficits, but the same goes for wasteful domestic discretionary spending. Cuts are impossible as long as too many policymakers make the Pentagon a sacred cow.

Unwinding this fiscal mess starts with a change in foreign policy strategy. Right now, we still have thousands of troops in Iraq and Afghanistan, and we just added over 3,000 troops to Saudi Arabia — not to mention a troop presence elsewhere throughout the Middle East and North Africa.

U.S. foreign policy should reform toward realism and restraint. That starts with pulling out of Afghanistan. It makes no sense that we are there after 18 years without any strategy to win. And it isn’t true that we must remain there to keep Afghanistan from becoming a terrorist safe haven. Refocusing our priorities also means pulling out of Iraq, Syria and Saudi Arabia. None of those places fall into America’s core interests, and America’s prolonged stay compounds regional issues.

Instead, America should focus on great-power competition and building up our deterrence capabilities. We should refocus on domestic priorities. America’s current economic crisis demands such a refocus. None of this is to say we should simply cut defense spending and use that to expand domestic spending. Rather, policymakers should employ a shrewd strategy focusing our limited resources on core U.S. priorities.

Willis L Krumholz is a fellow at Defense Priorities, a think tank that promotes less militaristic foreign policies. He holds a JD and MBA degree from the University of St. Thomas. His article is edited from The Hill, May 15, 2020, and reprinted in PeaceMeal, July/August 2020.

(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.)

Balancing the national checkbook

Jim Toedtman, editor, AARP Bulletin, July-August 2011

As a reporter, I spent years following the money — from scoundrels and scammers on Long Island, to town and county budgeteers, to Washington tax writers and big spenders. That journey included a seat at the Senate Budget Committee hearing on Jan. 25, 2001, when Federal Reserve Chairman Alan Greenspan famously concluded that the federal government faced a huge $5.6-trillion budget surplus over the next decade, and the nation needed a tax cut. Congress leaped at the opportunity. But the lawmakers missed the rest of his message. “Economic relationships,” he told them that day, “are different from anything we have considered in recent decades,” and the projections could be wrong. His conclusion: Consider a short-circuit for the tax cuts if targets in the surplus trajectory aren’t hit.

No one listened to that part. Instead, we went on an $11.4-trillion spending spree to fight two wars, expand Medicare, finance a sequence of gigantic tax cuts, and battle the greatest economic challenge in two generations.

What happened to the age of prudence? In a word, plastic.

As a nation, we stopped saving, became greedy and put our expenses on a credit card that will be paid off by our kids. Spending became the easier choice, especially after the reassurance by Dick Cheney that “Reagan proved that deficits don’t matter.” Now we know better. They certainly do matter.

The age of plastic has produced a budget gap that is exceeded only by the chasm between what the public expects from government and the willingness to pay for it. In the words of the head of the nonpartisan Congressional Budget Office, “The United States faces a fundamental disconnect between the services that people expect the government to provide, particularly in the form of benefits for older Americans, and the tax revenues that people are willing to send to the government to finance these services.”

The nation is facing a big money moment. Washington lawmakers must raise the legal borrowing limit. The money has already been spent, after all. But while the lawmakers wrangle, it’s worth recalling the common sense warning about balance. Spending is easy. Saving and building up reserves is slow and painful — but necessary.

– PeaceMeal July/August 2011

(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.)

House boosts military budget in time of austerity

Money for the Pentagon and the nation’s wars in Iraq and Afghanistan is proving largely immune from the budget- cutting that’s slamming other government agencies in the rush to bring down the deficit. On a 336-87 vote July 8, the Republican-controlled House overwhelmingly backed a $649-billion defense spending bill that boosts the Defense Depart-ment budget by $17 billion. The strong bipartisan embrace of the measure came as White House and congressional negotiators face an August 2 deadline on agreeing to trillions of dollars in federal spending cuts and raising the borrowing limit so the U.S. does not default on debt payments.

While House Republican leaders agreed to slash billions from the proposed budgets for other agencies, hitting food aid for low-income women, health research, energy efficiency and much more, the military budget is the only one that would see a double-digit increase in its account beginning October 1. Concerns about undermining national security, cutting military dollars at a time of war, and losing defense jobs back home trumped fiscal discipline in the House. Only 12 Republicans and 75 Democrats opposed the overall bill.

“House Republicans demonstrated responsible leadership that sets priorities and does not jeopardize our national security interests and our nation’s ongoing military efforts,” Rep. Tom Price (R-Ga.), chairman of the House Republican Policy Committee, said in a statement. But Rep. Barney Frank, D-Mass, scoffed at the suggestion that “everything is on the table” in budget negotiations between the Obama administration and congressional leaders. “The military budget is not on the table,” he said. “The military is at the table, and it is eating everybody else’s lunch.”

The bill would provide $530 billion to the Pentagon and $119 billion to cover the costs of the wars in Iraq and Afghanistan. It would provide a 1.6-percent increase in pay and buy various warships, aircraft and weapons, including a C-17 cargo plane that the Pentagon did not request, but is good news for the Boeing production line in Long Beach, Calif During three days of debate, the House easily turned back several efforts to cut military spending, including amendments by Frank on the Democratic side and tea party-backed freshman Rep. Mick Mulvaney, R-S.C. Frank’s amendment to cut $8.5 billion failed on a 244-181 vote July 7. Mulvaney’s amendment to set the Pentagon budget at current levels failed 290-135.

The House also rejected an amendment by Rep. Dennis Kucinich (D- Oh.) that would have barred funds for the U.S. operation against Libya. The vote was 251-169. The House has sent mixed signals on Obama’s military action against Libya, voting to prohibit weapons and training to rebels looking to oust Moammar Gadhafi, but stopping short of trying to cut off money for American participation in the NATO-led mission.

The overall bill, which must be reconciled with a still-to-be- completed Senate version, is $9 billion less than President Barack Obama sought. The White House has threatened a veto, citing limits in the legislation on the president’s authority to transfer detainees from the U.S. prison at Guantanamo Bay, Cuba, and money for defense programs the administration didn’t want.

– edited from The Associated Press, July 8, 2011
PeaceMeal July/August 2011

(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.)

Defense expenditure per capita in constant 2008 U.S. dollars

                                  1998           2008

United States         $1,500        $2,750

Russia                          500              600

Pentagon can cut the military budget and still keep us safe

John Cavanagh, Anita Dancs and Miriam Pemberton

The upcoming election is our best chance in years to demand a new foreign policy, one that puts the terrorist threat in proportion and engages the world differently. Under this policy, the military would assume its rightful role as a tool of last resort.

During the Cold War, the Soviet Union was willing to try to match our military spending. Now, no country even thinks of trying. As terrorism has replaced the Cold War as the new focus of our foreign policy attention, the United States has neglected four equally urgent security challenges: climate change, nuclear weapons, regional conflicts and growing global inequality. None of these requires a military cure. A foreign policy that refocuses its attention on these challenges would involve major shifts in our foreign policy budget.

A $213-billion cut in military spending is possible almost immediately, according to a preliminary analysis at our organization, the Institute for Policy Studies. This would include ending the expensive Iraq occupation, closing many U.S. overseas military bases, eliminating weapons systems that are redundant and economically inefficient, and cutting military assistance to other countries.

First, we must end the immoral and counterproductive Iraq War. A small fraction of the $99 billion that the United States is likely to spend on the war in 2008 could be used to bring the U.S. troops home. A larger amount would be needed to help those troops transition into civilian life, similar to the post-World War II GI Bill. To that end, troops brought home from Iraq — as well as from other bases overseas — could be retrained to help create a clean energy and energy-efficient infrastructure in the United States to stave off the disastrous effects of climate change. This kind of investment could generate millions of new jobs retrofitting U.S. buildings and constructing solar, wind and other clean energy infrastructures.

Second, we must cut the sprawling network of U.S. bases around the world, many of which are relics of the Cold War. Today, nearly 700,000 military and civilian personnel are stationed overseas or at sea. Closing just a third of the more than 1,000 overseas facilities would save taxpayers $46 billion — but it’s an issue that none of the U.S. presidential candidates dares touch.

Most of these facilities are located in three countries: Germany (302 bases), Japan (111) and South Korea (106). These nations should top the list if, and when, the United States starts the rollback. But we also need to stop the new U.S. Africa Command and close U.S. bases in the Caspian Sea region, where our interests are tied to our fossil-fuel energy past rather than our clean energy future. What’s more, shutting down bases would remove targets of anti-Americanism overseas.

Like our allies, who remain secure without a network of bases around the world, the United States should put more foreign policy priority on engaging with other countries culturally, diplomatically and economically.

Third, at least 11 areas of unnecessary weapons spending could be cut from the budget without decreasing U.S. security — saving another $44 billion. These include the F/A-22 “Raptor” fighter jet, which was originally designed to counter a Soviet aircraft that was never built; the Ballistic Missile Defense, a system that doesn’t work for a threat that doesn’t exist; and the C-130J transport plane, a costly item that has 168 documented deficiencies.

Fourth, and finally, we can cut several smaller budget areas that include military assistance to countries that frequently enable human rights abusers, fuel conflicts and strengthen the military of countries at the expense of civil society. For example, more than $1 billion goes toward the so-called “drug war” in Colombia, Bolivia and Peru — roughly 70 percent of which funds military approaches that have increased violence and killings, yet done nothing to decrease the drug trade.

The United States currently spends nine times more money on its military forces than on all other security tools, including diplomacy, nuclear nonproliferation, peacekeeping, foreign aid and homeland security put together.

The American people know this over-militarized approach has not made them or the rest of the world safer. In an October 2006 Angus Reid poll, 65 percent said the country has been “too quick to get American military forces involved” in conflicts. Instead, the public supports more “preventive” measures. According to a November 2007 World Public Opinion poll, for example, 78 percent of Americans “believe that all countries should eliminate their nuclear weapons” through a well-established international verification system.

Our diplomatic mission requires more resources, particularly to address shortfalls in staffing and to upgrade antiquated information and communications systems. And even after 9/11, the Bush administration continues to shortchange the very programs that experts believe are needed to protect against terrorist threats — such as increased funding for our first responders and public health system. Such improvements would help us deal with other hazards and emergencies, as well.

Major deficiencies in our rail, transit security procedures and cargo screening also exist, according to the 9/11 Public Discourse Project, the successor organization to the 9/11 Commission. In each case, the main obstacle has been a lack of money.

In 1989, when the Berlin Wall came down and the world celebrated the end of the Cold War, a number of military experts and U.S. generals suggested that the United States could slash its defense budget without jeopardizing the country's security. “I’ve been maintaining for some time now;” former CIA Director William Colby said in 1993, “that our defense budget could safely and modestly be cut to one-half what it was in the later days of the Cold War.” At the time, the military budget stood at $300 billion. Fifteen years later, the Cold War is long over and the U.S. military budget has more than doubled — and that’s without taking inflation into account.

Voters — Republicans and Democrats alike — have been telling pollsters they want not a modest course correction, not a turned page, but a whole new book. With a new president as the author, let’s hope the book rewrites our country’s wildly unbalanced security policies.

John Cavanagh directs the Institute for Policy Studies (IPS) in Washington DC. Anita Dancs is research director of the National Priorities Project. Miriam Pemberton is a research fellow at IPS. Their article is excerpted from In These Times, April 2008.

– PeaceMeal, May/June 2008

(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.)