Sunday, February 20, 2011

A liberal on defense spending

Paul Krugman, the Nobel Prize-winning economist - and science fiction fan, I might add - who writes for The New York Times, is an unabashed liberal. But unlike conservative pundits, he lives in the real world and he's willing to look at the data, rather than just believe whatever he wants to believe.

So here's what he says on defense spending (the above graph, from the federal Office of Management and Budget, was taken from his post, too):
One thing I’m hearing and reading from liberal sources is the argument that we can find big savings by ending the war in Afghanistan, and more generally by cutting bloated defense spending. So, a few words on that issue.

Yes, there’s a lot of wasteful defense spending — in fact, it’s almost surely the most waste-ridden part of the federal budget, because politicians are afraid to say no to anything for fear of being called unpatriotic. And even aside from the question of the Bush wars, it has long been clear that we’re still spending a lot to head off threats that haven’t existed since the fall of the Soviet Union. Read Fred Kaplan for a sense of just how bad it is.

Then there are those wars. I was against Iraq from the beginning — and I was pretty lonely out there on the pages of major newspapers. Afghanistan made sense in 2002, but I have no idea what we’re doing there now.

But if we’re talking about fiscal issues, you have to bear the arithmetic in mind. We’re not living in the 1950s, when defense was half the federal budget. Even a drastic cut in military spending wouldn’t release enough money to offset more than a small fraction of the projected rise in health care costs.

Now 20% of the federal budget is still a large part of it. And in raw numbers, it's certainly an enormous pile of money. If you didn't click on that link to the Fred Kaplan article, I recommend that you do so now. The 2011 Pentagon budget is incredible, far bigger - even after adjusting for inflation - than any military budget since World War II:
Still, $708.2 billion, the sum requested just for fiscal year 2011, is an extraordinary chunk of change. The Center for a New American Security (hardly a dovish think tank) calculates that, adjusting for inflation, this sum is 13 percent higher than the defense budget at the peak of the Korean War, 33 percent higher than at the peak of the Vietnam War, 23 percent higher than at the peak of the Cold War, and 64 percent higher than the Cold War's average.

And there's a lot of waste in it. Our only enemies are a rag-tag bunch of religious terrorists, but the Pentagon budget seems to be more about protecting defense contractors. I thought the part about evenly dividing budget goodies between the Army, Navy, and Air Force to be particularly enlightening:
There has been one constant in the defense budget ever since the mid-1960s: the money has been divided almost exactly evenly—never varying by more than a couple of percentage points—among the Army, Navy, and Air Force. For all of Gates' apparent rationality, the same is true in this budget: 32 percent goes to the Army, 35 percent goes to the Navy, 33 percent goes to the Air Force. (For more on this, click here.) It is extremely unlikely that our national-security needs just so happen to demand a response that gives each of our three services a nearly equal share of the military budget.

In other words, the Defense Department is a monstrous bureaucracy, and its budget is a political document—a set of weights and balances to keep the natural tensions from erupting out of control. (In the 1950s, when budgets were very tight, and before this tacit pie-splitting deal was worked out, the service chiefs saw one another as, quite literally, enemies. For an example, click here.)

And as Kaplan notes, the actual costs are likely to be even higher - much higher, although this budget isn't quite as badly in the realm of pure fantasy as the Bush military budgets were. We could save a lot of money through cuts in defense spending, without impacting our national security much, if at all. (Of course, the political difficulty of that would be immense, but that's a separate issue.)

Nevertheless, as Krugman points out, this isn't the 1950s, when defense spending was half the budget. These days, it's a significant part of the budget - and it's far, far more than any other nation in the world spends, not even in the same ballpark - but cutting the defense budget won't solve our budget woes, not all by itself. And this is from a man whose blog is called The Conscience of a Liberal.

In a follow-up post, Krugman includes the above graph, also from the OMB, that shows defense spending as a percent of gross domestic product. In that respect, too, it's considerably lower today than in the 1950s and 1960s. (Remember, it's not lower in dollars - not even in inflation-adjusted dollars - just as a percent of the federal budget and percent of GDP.)

Krugman tries to further explain his point:
I’m baffled by commenters who read my earlier note as an endorsement of current levels of defense spending. As I said, the defense budget is full of waste, we’ve been fighting wars that we shouldn’t, and we’re defending against threats that no longer exist. That defense buildup after 9/11 was outrageous: we were attacked by a handful of terrorists wielding box-cutters (or something like that — I’m aware that’s not certain), and we responded by (a) buying a lot of heavy tanks (b) invading a country that had nothing to do with the attack.

... Despite all that, it remains true that defense spending isn’t at the heart of the budget issue. The current Obama budget calls for defense spending of 3.4% of GDP by 2016; you can make the case that the number should be closer to 2%. But that’s not enough to avoid hard choices about health care and revenue.

If you can’t see how it’s possible both to believe that we waste a lot of money on the military, and to believe that ending that waste would make only a modest contribution to our fiscal problem, I can’t help you.

His point, if I can paraphrase it, is that cutting military spending will certainly help, but it wouldn't be a magic fix (not that I think anything is a magic fix). Certainly, cutting defense spending makes far more sense than chopping away at the relatively minor costs of protecting our air and water or actually helping people in other ways, but it's not going to be anywhere near enough by itself.

In order to really solve our budget woes, we're going to have to get a handle on health care costs (not "entitlements") and we're going to have to raise taxes. None of this will be popular, but we can't be serious about deficit reduction without it.

Note that liberals are far more realistic than conservatives when it comes to deficit reduction (when it comes to everything, pretty much). Certainly, cutting defense spending makes a lot more sense than anything Republicans are proposing. But Krugman is saying - and he makes a very persuasive argument - that we're dreaming if we think that will do it by itself.

And personally, I'd really like to stay grounded in reality. Of course, that's easier for us liberals, because reality has a well-known liberal bias. :)

1 comment:

Jim Harris said...

I've always thought the money for the defense program should be a set percentage of the budget and then let the armed forced fight over how it would be spent. Don't let Congress turn various programs into pork for their districts. Also, if we thought defense was being inefficient, then cut their fixed percentage to force them to make better decisions.