Given the U.S. fiscal situation, should military spending change (how much?)

[fnord123]

The Iran/hyperinflation thread threw me for a loop, because I saw some positions posted that surprised me.  So I want to set my self up for another surprise I guess

The following graph is from http://en.wikipedia.org/wiki/List_of_co ... penditures:

The world's top 7 largest military budgets in 2010

From the same Wikipedia article, if one takes the per-country spending and adds it up, one finds the USA spends more money on its military than the next 19 countries combined - most of whom can be considered either neutral (I'm including countries like Brazil, India, etc., in the neutral bucket) or friends (UK, Japan, Germany, Italy, Canada, etc.).  The two countries least aligned with U.S. interests in the top 20, Russia and China, combined spend less than one fourth what the U.S. spends.

Given this, what are people's thoughts on U.S. military expenditures in light of our current fiscal situation?  For folks who would change spending (in either direction), what would you cut and/or spend more on?

[MediumTex]

It seems excessive to me.

I don't know what I would cut, but I might scale back the U.S. presence in Japan, South Korea and Germany.  Those wars ended decades ago and it seems like simply wrapping up our military presence in those nations is surely overdue.

What also bothers me is that large standing armies have a tendency to find a conflict to get involved in.  Wasn't that sort of the story of Europe for several centuries?

[Ad Orientem]

The Cold War is over, and we won.  It's time to rethink our place in the world and stop trying to run a global empire.  We absolutely need to reassess all of our overseas commitments.  This is not the same thing as saying we need to wall ourselves off from the world.  But it is time to ask some hard questions, like...

1. Why are we still part of NATO, an alliance founded for purely defensive purposes to counter the threat of a Soviet invasion of Western Europe?  We now pay 75% of NATO's budget despite Europe having an economy that is roughly equivalent in size to our own.  There are no soviet armored divisions poised on the Fulda Gap ready to steam roll into West Germany.  And with the exception of some limited support in Afghanistan the only military actions that NATO has participated in have been wars of aggression, against Serbia and Libya.

2. Why are we maintaining troops in S. Korea when the S. Koreans could obliterate any N. Korean invasion in a New York minute?  North Korea's army looks impressive in numbers but the country can't even feed it's people and it is doubtful that there is enough gas for their 1950's vintage tanks to last more than a couple of days.

3. Why are we meddling in the Middle East? That place is the reverse of the Midas Curse.  Everything we have touched there in the last half century has come back to bite us in the a$$.

4. How many nuclear bombs do we need when we posses enough already to annihilate life as we know it several times over?

Food for thought.

[stone]

The Cold War is over, and we won. 

The Taliban defeated the USSR according to them. I saw them on TV saying, "we destroyed world communism, now we will destroy world capitalism" . I guess the Afghan war was a very big part in the fall of the USSR but to my mind the USSR defeated itself by not doing the right thing by its own people. Not defeating ourselves in that way is the real challenge for us too IMO.

[FarmerD]

If you want to experience a Soviet style centralized bureaucracy in action, join the military.  You quickly discover outrageous waste and serious misallocation of resources along with zero personal responsibility.  I believe we could have the same national defense capability if we cut defense spending by 30-40 percent if we just eliminated the insane waste of resources. 

For a start, I'd:

1) eliminate all manned fighters/bombers
2) eliminate most of the naval surface fleet
3) reduce pensions
4) eliminate most support personnel
5) convert most active duty personnel to Reserve status
6) close half of US bases
7) close most foreign bases

[dualstow]

The problem is that I don't know how much these things cost, but I would keep a healthy drone budget.
I do worry that our drones could be compromised, however, so keeping them secure would be part of that budget.

[moda0306]

I really wonder how much it costs us to have bases in Germany, Japan, etc... and what the main purposes are.  I could see it being to our benefit to maybe have areas that we've "rented" from other countries to keep a base of operations in other countries.

Geographic diversification, I guess....

[stone]

I really wonder how much it costs us to have bases in Germany, Japan, etc... and what the main purposes are.  I could see it being to our benefit to maybe have areas that we've "rented" from other countries to keep a base of operations in other countries.
Geographic diversification, I guess....

I wonder whether much of it is like not knowing what household stuff to clear out and so filling a spare room full of junk. The inertia response is to keep every base ever opened.

[TripleB]

Two thought points:

1) If we cut our military presence, what does it do to unemployment? Where do all the military people go? Where do all the government contractors go? If we cut military spending there's two possibilities:

a) cut taxes
b) pay down the debt

Would either of those actions raise employment enough to compensate for the unemployment caused by loss of military spending?

2) If we cut out global military presence, what happens to the ponzi scheme of the USD?

[Gumby]

Devil's Advocate:

http://www.businessinsider.com/america- ... ice-2011-8

From bases in Europe, the Middle East and Asia, the US military protects the world’s shipping lanes, making sure the clockwork of the global economy runs smoothly and goods and oil can be shipped to and back. This is the part of the global American military footprint that actually matters, not the wars.

Everyone takes it as a granted that you can load a ship full of oil in Saudi Arabia and take it to China and not have anyone steal it. And that you can load a ship full of toys and iPhones in China and take it to the US and not have anyone steal it. And so on.

But even a cursory look at world history shows that this is exceptional in the history of the world. The reason why this happens is because there is a benign, global military hegemon which ensures the security of the world’s shipping lanes, on which the globalized world economy, and therefore the U.S. economy, depends.

Every era of successful globalization, from Pericles to Queen Victoria, has involved a naval hegemon to ensure the security of shipping, and therefore commerce. The hegemon provides this public good that lets other, smaller actors free-ride, not because it's in the thrall of neocons, but because it directly benefits from strong, safe international trade.
Source: http://www.businessinsider.com/america- ... ice-2011-8

You don't have to agree with it, but many corporations (and China) want increased protection and support in certain regions to keep oil flowing between the Middle East and China, so that products can come to the US. And keeping every corner of the globe relatively stable ensures that those regions are more likely to accept US dollars — particularly when US dollars are being spent in those countries to keep those countries stable.

And, when you maintain a Blue Water Navy, you have to spend some money.

http://en.wikipedia.org/wiki/Blue-water_navy

The US has no insolvency risk, so there is no monetary risk (beyond inflation) of deficit spending to support the military.

I'm not saying I support this imperialistic policy. I don't. I'd much rather see productive employment in the US — rather than unproductive military/weapons employment. I'm just explaining why some people want more military spending — to support a global dollar infrastructure.

[moda0306]

Triple B,

If foreigners no longer want to hold our dollar as a mediume of exchange and/or store of value, they can send it back here for goods we produce... maybe that will serve to hire our "laid off" service members.

That said, I really don't feel like abandoning our service members to this crappy economy.  I'm not afraid of temporary deficits to keep them on their feet until the economy heals.

Gumby,

Great perspective there.

[moda0306]

TripleB,

Coming back to trade deficits... we're currently net exporting $500 billion per year in our currency in exchange for foreign goods.

How much do you think a strong military pullback will change that?

I really don't know... this gets complicated, and outside of talking macro in terms of widgets and savings accounts I get pretty weak pretty fast.

[Gumby]

See also...

http://en.wikipedia.org/wiki/String_of_Pearls_(China)

and

http://en.wikipedia.org/wiki/Strait_of_Malacca

25% all oil carried by sea passes through the Strait of Malacca. Most of the oil goes to China, Japan, and South Korea.

Piracy in the strait has risen in recent years. There were about 25 attacks on vessels in 1994, 220 in 2000, and just over 150 in 2003 (one-third of the global total). After attacks rose again in the first half of 2004, the Malaysian, Indonesian and Singaporean navies stepped up their patrols of the area in July 2004. Subsequently, attacks on ships in the Strait of Malacca dropped, to 79 in 2005 and 50 in 2006.
There are 34 shipwrecks, some dating to the 1880s, in the Traffic Separation Scheme (TSS), the channel for commercial ships. These pose a collision hazard in the narrow and shallow Strait.

Yearly haze from the smoke of raging bush fires, limiting visibility.
Another risk is the yearly haze caused by raging bush fires in Sumatra. It can reduce visibility to 200 metres (660 ft), forcing ships to slow down in the busy strait. Ships longer than 350 metres (1,150 ft) routinely use the strait.
Source: http://en.wikipedia.org/wiki/Strait_of_Malacca

See also: http://en.wikipedia.org/wiki/Piracy_in_ ... of_Malacca

The sea lines of communication from Hong Kong to Port Sudan have become a source of conflict with respect to China's future energy security. China is the world's second largest oil consumer and the third largest oil importer. China imports 15% of its oil from West Africa, is the largest consumer of Sudanese oil, and has signed long term contracts to develop Iranian oil fields.

With a wave of pirate attacks off the coast of Somalia in late 2008, the ongoing war in Darfur and the continued oppression by the Robert Mugabe regime in Zimbabwe, Chinese foreign policy has now shifted toward a more direct approach to dealing with such hostilities.

Source: http://en.wikipedia.org/wiki/String_of_Pearls_(China)

It makes sense for the US to keep a presence in these areas to ensure the region stays stable.


[align=center][img]http://upload.wikimedia.org/wikipedia/c ... cation.png[/img][/align]

[moda0306]

Do these countries pay us for these policing services?

[Gumby]

Do these countries pay us for these policing services?

Not a penny.

But as long as we keep the world stable, the world is willing to exchange our confetti-like dollars for everything we want.

If you ever talk to a neo-con, they aren't worried about the US running out of money (since it can't). The neo-cons worry that a key region will someday require payment for oil/goods in a foreign currency — in which case, we would be screwed because we would owe foreign-denominated debt.

Foreign-denominated debt is what usually causes hyperinflation. I think the neo-cons would threaten military action if a country ever demanded payment in a foreign currency.

[stone]

I suspect that they are "policing services" that are neither needed nor wanted nor would actually be deployed. The focus of the US military has hardly been on stopping piracy from Somalia and that is the only current example of a genuine case where a "trade route police" role might be called for.

[Gumby]

I suspect that they are "policing services" that are neither needed nor wanted nor would actually be deployed. The focus of the US military has hardly been on stopping piracy from Somalia and that is the only current example of a genuine case where a "trade route police" role might be called for.

It's not just about stopping piracy. The Chinese have an interest in controlling bases along their String of Pearls from the Middle East to China. And even Taiwan is a choke point. The entire region could become unstable if China stepped in and the US wasn't there to police it. Then we'd all be in a bad situation.

It's a very tense and difficult situation. Far easier for us to judge than to actually consider the consequences.

[moda0306]

Gumby,

Why would the security service we offer have anything to do with what they accept as payment?  Or is this basically the implied contract arrangement... you accept $$'s and we will defend your shipping lanes?

And how would we have "foreign denominated debt" if domestic companies and individuals siimply had to use a foreign currency to do some of their business?

[stone]

Gumby, isn't there, a massive difference between saying that the US is policing trade routes and saying that the US  promises to prop up dictators so long as the dictators will sell oil for USD and spend those USD on US treasury bonds or US stocks? The former is the US giving something to the world for no payment. The latter is the US getting oil etc for free (or for the cost of the military/ill feeling from the people who live under those dictators).

I agree that the US military seems to be about enforcing global use of the USD for commodity trading. I'm very dubious indeed about "policing global trade" being a description of what is occurring.

[Gumby]

My apologies. I was oversimplifying the process.

Here's how it works. US Corporations tend to be one of the driving force behind the military. Shipping companies, oil companies, etc will lobby members of the U.S. Senate Armed Services Committee to ensure that their oil and goods are secure on their way across specific shipping lanes. By ensuring that free trade can happen, securely, this makes it more likely that US dollars will be accepted as corporations globalize. China does the same thing, and by keeping a presence everywhere, we ensure that free trade can happen by keeping regions stable. When regions are stable, they tend to accept dollars, since US corporations will have a presence there.

It was just easier to say that we protect the shipping lanes and countries accept dollars in exchange. Sorry for the over-simplification.

[stone]

http://www.dailypaul.com/187177/what-do ... ainst-them

"The main thing these "arch enemies" had/have in common is that each one of them trades (or threatened to trade) their commodities (mainly oil) for something OTHER than U.S. dollars ie:

1. IRAQ. In late 2000, Saddam Hussein claimed he would no longer accept U.S. dollars for Iraqi oil but instead Euros or gold (Immediately after the fall of Bagdhad, Iraqi oil once again traded for U.S. dollars).

2. IRAN. For several years now, Iran has been trading their oil for a different currency other than U.S. dollars (called an Oil Bourse). This is the key reason we are angling for an attack.

3. LIBYA. Qaddafi was trying to establsh a new African currency (backed by gold) which would have competed with the dollar and the Euro.

All these actions threatened the hegemony of the U.S. dollar (the declared reserve currency of the world since the Bretton Woods agreement in 1944).

So, all our military actions are economically-based.

Somehow they must threatened profits of elite central bankers or commodity companies (mainly oil).

I don't understand why it's so imperative for the U.S. dollar to remain the world's reserve currency, but it probably has nothing to do with the well-being of the average American citizen.

My guess is it's about protecting PROFITS OF ELITE (Central) BANKERS AND HUGE CORPORATE INTERESTS.

They apparently have the power fo convince the U.S. government to use our military to enforce their wishes."

[Gumby]

I don't understand why it's so imperative for the U.S. dollar to remain the world's reserve currency, but it probably has nothing to do with the well-being of the average American citizen.

It's about avoiding owing foreign denominated debt. If the US owed foreign denominated debt (in exchange for oil/resources), we'd be in big, big trouble.

[stone]

Saudia Arabia accepting USD has zero connection to US corporations operating in Saudia Arabia IMO. Saudia Arabia uses the nationalized Saudi oil company to pump the oil don't they. If every US corporation were to cease trading with Saudi Arabia, then I think they would still only sell oil for USD. They don't want USD to buy groceries with. They are in a pact whereby the US military will ensure that they remain in power so long as they sell oil for USD and spend those USD on US treasuries and stocks. Am I in a muddle about this? Wasn't this all tied in with the 9/11 atrocity?

[stone]

I don't understand why it's so imperative for the U.S. dollar to remain the world's reserve currency, but it probably has nothing to do with the well-being of the average American citizen.

It's about avoiding owing foreign denominated debt. If the US owed foreign denominated debt (in exchange for oil/resources), we'd be in big, big trouble.

I guess Ron Paul wasn't implying that the USA would go into debt to buy oil but rather use exports of goods and services made in the USA (creating US jobs) as a way to buy oil. That is what Stiglitz advocates. He says that for most Americans it would make them better off. Have you seen his stuff about using SDRs for global trade?

[moda0306]

Gumby,

How is the act of corps obtaining foreign currency to do business overseas the equivalent of our gov't having foreign-denominated debt?

This makes no sense to me.