why we won't cut the defense budget even if the supercommittee (predictably) fails to cut the government

Leon Panetta may be full of angst that massive Defense cuts will occur is the Congressional supercommittee can't agree on cuts and tax increases elsewhere, but he needn't worry.

The Military-Industrial complex is so thoroughly entertwined in the American political economy that it is now an inoperable cancer.



Here's how.  Check any list of America's top ten exports, and you will get a list like this (from 2008):

1. Civilian aircraft … $74 billion, up 1.3% from 2007 (5.7% of total US exports)

2. Semiconductors … $50.6 billion, up 0.3% (3.9%)

3. Passenger cars … $49.6 billion, up 13.3% (3.9%)

4. Medicinal, dental and pharmaceutical preparations … $40.4 billion, up 15% (3.1%)

5. Other vehicle parts and accessories … $39.9 billion, down 10.1% (3.1%)

6. Other industrial machinery … $38.1 billion, down 0.6% (3%)

7. Fuel oil … $34.9 billion, up 124.1% (2.7%)

8. Organic chemicals … $33.4 billion, up 5.5% (2.6%)

9. Telecommunications equipment … $32.9 billion, up 4.6% (2.6%)

10. Plastic materials … $31.6 billion, up 8.7% (2.5%).

What's missing?  Arms exports, of course.  They are hidden in the other categories, and are--in fact--the USA's largest category of exports.


From CNN Money:

The Department of Defense last year told Congress of plans to sell up to $103 billion in weapons to overseas buyers, a staggering rise from an average of $13 billion a year between 1995 and 2005, according to Deutsche Bank analyst Myles Walton. Signed agreements have tripled since 2000.

Moreover, lest you think this is some sort of anomaly, please note that jobs growth over the past decade has been primarily military and defense-related jobs:

In the past nine years, non-industrial production in the US has declined by some 19 percent. It took about four years for manufacturing to return to levels seen before the 2001 recession — and all those gains were wiped out in the current recession.

By contrast, military manufacturing is now 123 percent greater than it was in 2000 — it has more than doubled while the rest of the manufacturing sector has been shrinking…

As Robert Reich said last year,

America’s biggest — and only major — jobs program is the U.S. military.

Over 1,400,000 Americans are now on active duty; another 833,000 are in the reserves, many full time. Another 1,600,000 Americans work in companies that supply the military with everything from weapons to utensils. (I’m not even including all the foreign contractors employing non-US citizens.)

If we didn’t have this giant military jobs program, the U.S. unemployment rate would be over 11.5 percent today instead of 9.5 percent.

And without our military jobs program personal incomes would be dropping faster. The Commerce Department reported Monday the only major metro areas where both net earnings and personal incomes rose last year were San Antonio, Texas, Virginia Beach, Virginia, and Washington, D.C. — because all three have high concentrations of military and federal jobs.

Consider this graphically (click the image to see a more depressingly large view):

Economist Dean Baker points out that military spending significantly hurts jobs and the expansion of the economy in the long run:

Defense spending means that the government is pulling away resources from the uses determined by the market and instead using them to buy weapons and supplies and to pay for soldiers and other military personnel. In standard economic models, defense spending is a direct drain on the economy, reducing efficiency, slowing growth and costing jobs.

A few years ago, the Center for Economic and Policy Research commissioned Global Insight, one of the leading economic modeling firms, to project the impact of a sustained increase in defense spending equal to 1.0 percentage point of GDP. This was roughly equal to the cost of the Iraq War.

Global Insight’s model projected that after 20 years the economy would be about 0.6 percentage points smaller as a result of the additional defense spending. Slower growth would imply a loss of almost 700,000 jobs compared to a situation in which defense spending had not been increased. Construction and manufacturing were especially big job losers in the projections, losing 210,000 and 90,000 jobs, respectively.

But, of course, we can't cut the defense budget, not because we are made safer by that expenditure; we currently spend more on our military than the following countries combined:

People's Republic of China 

France

United Kingdom

Russia

Japan

Germany

Saudi Arabia

Italy

India

Brazil

Australia

South Korea

Spain

Canada

Israel

United Arab Emirates

Turkey

Netherlands

Afghanistan

But what the defense budget has done is spread itself around.  Virtually every key congressional district is the beneficiary of a key defense contractor that provides sufficient jobs to be an untouchable third rail for all our legislators.

So guess what?  No matter what--no matter the fact that holding 800 bases worldwide does not make us safer (notice that China is pursuing a completely different global grand strategy and spending only about 20% as much as we on its military)--no matter that increased defense spending represents unwise government intervention in the free market--no matter that maintaining the facade of a realistic strategic threat to the US requires us to surrender civil liberties right and left while allowing the government to hold prisoners indefinitely (regardless of court orders) and lie about the kinds of files it keeps (legally!!!), we will continue to forget the prophetic words of Thomas Jefferson:

"There are instruments so dangerous to the rights of the nation and which place them so totally at the mercy of their governors that those governors, whether legislative or executive, should be restrained from keeping such instruments on foot but in well-defined cases. Such an instrument is a standing army." -1789

PS--before some of my friends on the right chime in:  I spent over 20 years in the US military helping defend our country.  With a prudent, non-interventionist foreign policy and a restructured force, it is ludicrous to contend that the US cannot secure itself from enemy attack, keep faith with our closest allies, and keep the sea lanes open to commerce for no more than, say, four times what the old men in Bejing are spending (which is, to say, $500 billion or under).

I think an argument can be made that we can still have the best military on that planet for $350-400 billion.