A defense buildup we don’t need
President Donald Trump’s proposal on defense spending, and how to pay for it, would be devastating for the nation’s welfare.
As a boy growing up in Cleveland, one of my earliest memories of my father was that he had only one suit. When I finally got around to asking him why, he said that he didn’t need another one, and besides, there were other things that the family needed that were more important.
My father wasn’t an economist; he worked in auto and machine tool factories. But an economist looking at his statement would conclude that the usefulness/satisfaction (what economists call utility) of that second suit was so low that the family’s money would be better spent on something that had greater utility for the family.
Contrast the sentiment in the suit example with the Trump proposal to increase defense spending. Defense spending in 2016 was more than $600 billion, which accounts for 54 percent of discretionary spending. To pay for this increase in defense spending, the administration proposes to slash the budgets of other discretionary programs. The stated need for the increase in spending is due to the fact that our military must be rebuilt, but a cursory review of the facts would suggest otherwise.
There are 18 operational aircraft carriers in the world, of which 10, or 55 percent, belong to the U.S. Our newest carrier, the Gerald R. Ford, will cost more than $13 billion, more than twice the cost of other Nimitz class carriers.
The administration also wants to upgrade our nuclear capability. According to the Federation of American Scientists, nine countries have 16,300 warheads, of these, 93 percent reside in Russia or the U.S. The U.S. alone has 7,300 warheads or 45 percent of the total.
According to the National Priorities Project, the U.S. outpaces all other nations in military expenditures. Military spending, worldwide, totaled more than $1.6 trillion in 2015, the U.S., with 5 percent of the world’s population, accounted for 37 percent of the total. U.S. military expenditures are roughly the size of the next seven largest military budgets around the world, combined.
In addition to all this, the Defense Department has an Overseas Operations Contingency (OOC) fund which is not subject to the budget sequester and by 2015 had increased to $64 billion. The original intent of this fund was to fund the wars in Iraq and Afghanistan, but today is considered by may to be simply a defense department “slush fund.”
But the argument against further increases in the defense budget lies not just in the fact that the extra usefulness of military spending is low, rather it’s the idea that when we make a simple cost/benefit analysis, the costs (opportunities forgone) will vastly outweigh the benefits (supposed increases in national security).
The administration is proposing no cuts in Medicare, Medicaid and Social Security programs that are essential to the welfare of older citizens with the result that there will be a big impact on other programs. These cuts will generate the costs that need to be evaluated before we make any decisions on defense spending.
Consider some of the specific budget cuts being proposed. The State Department’s budget is scheduled to be reduced by 37 percent. Gutting the State Department’s budget will force the department to reduce its activities, losing us the benefits of successful diplomacy.
Another candidate for budget cuts, one partially controlled by the State Department, is foreign aid. The budget of $30 billion looks large, but as a percent of GDP, the U.S. does not rank in the top 10. Winning the ideological war with our enemies is more likely with robust financial assistance to those in need as opposed to relying solely on military action.
The IRS, a perpetual target of Republicans, is scheduled for a 14 percent reduction. These cuts will hinder the government ability to efficiently collect taxes and minimize tax evasion. The EPA, another Republican target, is scheduled for a 24 percent reduction. The EPA is the agency tasked with protecting human health and the environment by writing and enforcing regulations based on laws passed by Congress. Budget cuts, which hamper the agency’s ability to enforce water and air quality regulations, will carry significant social costs.
All of this is not to say that national security couldn’t be enhanced by a reconfiguration of existing spending levels, but national security must be looked at in light of the fact that the nation has a multitude of goals, jobs, health care, poverty, discrimination and environmental concerns.
With defense spending at more than $600 billion, it seems clear that further increases will add little to our security and will push us into an era where the public welfare will actually decline.
Gary Latanich, Ph.D., is professor emeritus of economics at Arkansas State University. He can be contacted by email at firstname.lastname@example.org.