Life is all about tradeoffs. That is the core of economics and it applies to military spending as much as anywhere else. Politicians are all for strong defense, but not all of them are willing to take a stand on paying for it.
So the next time you hear someone decrying the fact that the Obama administration has proposed slower growth of military spending than what would support current force levels, ask them, “Well, would you be willing to raise taxes to pay for it?”
If they hesitate or give you some nonsense about how if we cut taxes further, we will magically have money for everything, you know they are not serious.
Dwight Eisenhower and Harry Truman were serious. Both grew up poor and had their careers shaped by the Depression. Perhaps that is why both understood difficult tradeoffs.
Both also knew the military. Truman commanded an artillery battery that saw some hard combat in 1918. Ike never was in combat per se but had four decades of Army service that included commanding the European Theater of Operations in World War II. So they were not like the “chickenhawks” so common in politics today.
Both Truman and Eisenhower oversaw real cuts in defense spending, albeit after major wars. Both were willing to sacrifice troop strength to be able to afford new technology. These two presidents, one a Democrat, the other a Republican, clearly understood that our nation faced competing needs and that someone had to make hard choices.
Defense outlays for fiscal year 2011, adjusted for inflation, were more than twice as high as for FY 2001, the last year before we began the Global War on Terror. They were 22 percent higher than for FY 2008, the last year for which the Bush administration had sole budgetary authority. So, on the surface at least, it is hard to argue that we are not spending a lot on defense.
Moreover, the administration’s recent proposals, while touted as substantial cuts by both sides, only are so in comparison with a trend line that would keep forces at current high levels, continue most hardware procurement programs now in the pipeline, and increase spending in new areas such as drone aircraft. But, except in the first couple of years, actual outlays will continue higher than at present.
I personally would like to see greater spending than the administration proposes. However, I also think that we need to raise taxes enough to restore revenues to historic levels relative to GDP. If the alternative is even larger deficits, then the administration’s “cuts”‘ are prudent.
The defense and fiscal-policy course we embarked on in 2001 is one of the stupidest and most self-destructive ones in the history of the nation.
We had come off four years of nominal budget surpluses, the first since 1969. These resulted in great part from tax increases in the George H.W. Bush and Clinton administrations that still kept rates below where they had been for most of the Reagan years. Substantial declines in real defense spending after the fall of communism also helped.
Then, however, we went back to cutting taxes amid much hoopla that if we didn’t do so, the national debt would be all paid off by 2012 and that would be a big problem. The initial cut was before the attacks of 9/11, when it became apparent that we were involved in a quasi-war, whether we liked it or not.
If we had done what we had done in previous wars, we would have at least reversed those tax cuts. Instead, we cut them more in 2003 even as we entered a war of choice in Iraq. Americans who wondered what they could do for the nation were told to go to the malls and shop.
From 2002 through 2011, military outlays were $1.3 trillion higher than they would have been if they had stayed at the same fraction of GDP as in 1995-2001. Perhaps this spending was necessary, perhaps not. But it certainly was a mistake to simply tack it all onto the national debt.
For decades, people argued that Lyndon Johnson’s reluctance to ask for a tax increase to fund the Vietnam War helped fuel the inflation of the 1970s. But budget deficits in those years averaged 0.9 percent of GDP, compared with 4.2 percent during the Reagan years, 3.4 percent in the George W. Bush era and 9 percent so far in the Obama administration, so LBJ and the 1960s Congress now look like models of fiscal prudence.
People can have different views on how much we should spend on our military. But if we are not willing to pay for it through taxes, we only hurt ourselves.
Economist Edward Lotterman teaches and writes in St. Paul, Minn. Write him at ed@edlotterman.com.
