9.5: Militarism and the US Military Budget
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- 214611
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\(\newcommand{\avec}{\mathbf a}\) \(\newcommand{\bvec}{\mathbf b}\) \(\newcommand{\cvec}{\mathbf c}\) \(\newcommand{\dvec}{\mathbf d}\) \(\newcommand{\dtil}{\widetilde{\mathbf d}}\) \(\newcommand{\evec}{\mathbf e}\) \(\newcommand{\fvec}{\mathbf f}\) \(\newcommand{\nvec}{\mathbf n}\) \(\newcommand{\pvec}{\mathbf p}\) \(\newcommand{\qvec}{\mathbf q}\) \(\newcommand{\svec}{\mathbf s}\) \(\newcommand{\tvec}{\mathbf t}\) \(\newcommand{\uvec}{\mathbf u}\) \(\newcommand{\vvec}{\mathbf v}\) \(\newcommand{\wvec}{\mathbf w}\) \(\newcommand{\xvec}{\mathbf x}\) \(\newcommand{\yvec}{\mathbf y}\) \(\newcommand{\zvec}{\mathbf z}\) \(\newcommand{\rvec}{\mathbf r}\) \(\newcommand{\mvec}{\mathbf m}\) \(\newcommand{\zerovec}{\mathbf 0}\) \(\newcommand{\onevec}{\mathbf 1}\) \(\newcommand{\real}{\mathbb R}\) \(\newcommand{\twovec}[2]{\left[\begin{array}{r}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\ctwovec}[2]{\left[\begin{array}{c}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\threevec}[3]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\cthreevec}[3]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\fourvec}[4]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\cfourvec}[4]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\fivevec}[5]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\cfivevec}[5]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\mattwo}[4]{\left[\begin{array}{rr}#1 \amp #2 \\ #3 \amp #4 \\ \end{array}\right]}\) \(\newcommand{\laspan}[1]{\text{Span}\{#1\}}\) \(\newcommand{\bcal}{\cal B}\) \(\newcommand{\ccal}{\cal C}\) \(\newcommand{\scal}{\cal S}\) \(\newcommand{\wcal}{\cal W}\) \(\newcommand{\ecal}{\cal E}\) \(\newcommand{\coords}[2]{\left\{#1\right\}_{#2}}\) \(\newcommand{\gray}[1]{\color{gray}{#1}}\) \(\newcommand{\lgray}[1]{\color{lightgray}{#1}}\) \(\newcommand{\rank}{\operatorname{rank}}\) \(\newcommand{\row}{\text{Row}}\) \(\newcommand{\col}{\text{Col}}\) \(\renewcommand{\row}{\text{Row}}\) \(\newcommand{\nul}{\text{Nul}}\) \(\newcommand{\var}{\text{Var}}\) \(\newcommand{\corr}{\text{corr}}\) \(\newcommand{\len}[1]{\left|#1\right|}\) \(\newcommand{\bbar}{\overline{\bvec}}\) \(\newcommand{\bhat}{\widehat{\bvec}}\) \(\newcommand{\bperp}{\bvec^\perp}\) \(\newcommand{\xhat}{\widehat{\xvec}}\) \(\newcommand{\vhat}{\widehat{\vvec}}\) \(\newcommand{\uhat}{\widehat{\uvec}}\) \(\newcommand{\what}{\widehat{\wvec}}\) \(\newcommand{\Sighat}{\widehat{\Sigma}}\) \(\newcommand{\lt}{<}\) \(\newcommand{\gt}{>}\) \(\newcommand{\amp}{&}\) \(\definecolor{fillinmathshade}{gray}{0.9}\)Militarism and the US Military Budget
As discussed earlier, President Eisenhower eloquently warned about the influence of the US military and the size of the military budget. The defense industry remains a powerful force in the US economy six decades after Eisenhower issued his warning, and US military spending continues unabated. In 2011, military spending (defense outlays by the Department of Defense and certain other agencies; outlays include costs for the Iraq and Afghanistan wars) according to the government was approximately $768 billion. Defense outlays rose by 85 percent beyond inflation between 2000 and 2011 (see Figure 16.2).
Figure US Defense Outlays, 2000–2011 (Fiscal Year 2005 Dollars)
Source: US Census Bureau. (2012). Statistical abstract of the United States: 2012. Washington, DC: US Government Printing Office. Retrieved from http://www.census.gov/compendia/statab.
Clarifying the Military Budget
As large as it is, the $768 billion just cited as the “official” figure for the US military budget is misleading in at least two ways. First, it excludes several military-related costs such as veterans’ benefits and interest on the national debt from past military spending. When these costs are taken into account, the total 2011 military budget ranged between an estimated $1.2 trillion and $1.4 trillion (Friends Committee on National Legislation, 2012; War Resisters League, 2012).Friends Committee on National Legislation. (2012). Where do our income tax dollars go. Retrieved from http://fcnl.org/assets/flyer/taxchart11.pdf; War Resisters League. (2012). Where your income tax money really goes. Retrieved from https://www.warresisters.org/sites/default/files/FY2012piechart-color.pdf.
Second, the government states that defense outlays accounted for almost 20 percent of federal spending in 2011 (US Census Bureau, 2012).US Census Bureau. (2012). Statistical abstract of the United States: 2012. Washington, DC: US Government Printing Office. Retrieved from http://www.census.gov/compendia/statab. However, the calculation for this statement excludes the additional military expenses just discussed, and it uses a misleading measure of federal spending. This latter fact needs some explanation. Federal spending includes both mandatory and discretionary spending. As its name implies, mandatory spending is required by various laws and includes such things as Social Security, Medicare and Medicaid, and interest payments on the national debt. Much of these mandatory expenses are funded by trust funds, such as Social Security taxes, which are raised and spent separately from income taxes. Discretionary spending involves the money the president and Congress must decide how to spend each year and includes federal income tax dollars only. Critics of the military budget argue that it is more accurate to cite its share of discretionary spending rather than its share of all federal spending (i.e., mandatory plus discretionary).
Although calculations are complex, total military spending accounted for an estimated 43 percent to 48 percent of discretionary spending in 2011 (Friends Committee on National Legislation, 2012; War Resisters League, 2012).Friends Committee on National Legislation. (2012). Where do our income tax dollars go? Retrieved from http://fcnl.org/assets/flyer/taxchart11.pdf; War Resisters League. (2012). Where your income tax money really goes. Retrieved from https://www.warresisters.org/sites/default/files/FY2012piechart-color.pdf. To put that another way, between 43 percent and 48 percent of all federal income tax dollars were used for military expenditures that year. This percentage range is much higher than the 20 percent share of federal spending cited by the government solely for defense outlays.
The US Military Budget in International Perspective
However it is calculated, the US military budget is by far the highest in the world and in fact accounts for 43 percent of the world’s military spending. In 2010, the US official military budget (defense outlays only) was $698 billion. China ranked a distant second at $119 billion, followed by the United Kingdom at $60 billion and France at $49 billion (see Figure 16.3).
Figure International Military Spending, 2010
Source: Stockholm International Peace Research Institute. (2011). Background paper on SIPRI military expenditure data, 2010. Retrieved from http://www.sipri.org/research/armaments/milex/factsheet2010.
Lessons from Other Societies
Guns or Butter?
“Guns versus butter” is a macroeconomics phrase that illustrates the dilemma that nations face in deciding their spending priorities. The more they spend on their military (guns), the less they can spend on food for their poor and other domestic needs (butter).
In making this very important decision, Europe has chosen butter over guns. The wealthy European countries that compose the bulk of the Organization for Economic Cooperation and Development (OECD), an international consortium, spend 2.5 percent of their total economy (gross domestic product, or GDP) on their militaries. In contrast, the United States spends 5.1 percent of its economy on its base military budget, which does not include costs for veterans’ benefits, for the Iraq and Afghanistan wars, and military spending that falls outside the Pentagon’s budget.
The European nations’ decisions to limit their military spending allows more spending for social needs. As a result, observes one economics writer, most Europeans have “universal health care, deeply subsidized education (including free university tuition in many countries), modern infrastructure, good mass transit, and far less poverty” than the United States has. Perhaps worse, the United States ranks last among the world’s twenty wealthiest democracies in life expectancy and infant mortality and also ranks worst in the risk of dying before age 60. In addition, half of American children need food stamps at some time before becoming adults, while this problem is far rarer in Europe.
Compared to Euope, then, the United States has chosen guns over butter, leaving far less money for its social needs. As an economics writer wryly noted, “So remember to take pride in American power, and remember that it comes at a very high price.” In making this classic macroeconomics decision, the United States has much to learn from the wealthy nations of Europe.
Source: Holland, 2011Holland, J. (2011, June 17). Are we giant suckers? While the US blows money on the military, Europe spends dough on social programs. AlterNet. Retrieved from http://www.alternet.org/world/151337/are_we_giant_suckers_while_the_us_blows_money_on_the_military,_europe _spends_dough_on_social_programs.