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One of the predictable consequences of the unprecedented spending spree of President Obama
and the Democratically controlled Congress is the call for reduced spending for national defense in order to
partially pay off the enormous national debt that is now out of sight.
“Public angst about the mounting national debt, mixed with uneasiness about the future
of the United States as a military and economic super power is fueling a debate about the prospects of defense
spending. … Top U.S. officials, including the chairman of the Joint Chiefs of Staff Adm. Michael Mullen, have
dubbed the soaring debt ‘our biggest security threat.’”
(Ref. 1)
“With a defense budget exceeding $700 billion, … the United States is now spending more
than at any time since World War II. Yet, as a share of the U.S. economy, defense amounts to 4.8 percent, which
is lower than what the nation spent during the Vietnam and Korea wars, or World War II. ‘As a percentage of GDP,
we’re below average.’” (Ref. 1)
“The 2010 Quadrennial Defense Review {QDR} and the fiscal year 2011 defense budget
proposal seek to achieve some worthy goals.” However, missing “is an acknowledgement of disconnects between
program priorities and existing spending plans.” There is also, “the unsustainable nature of the federal budget
and its impact on defense resources.” As a result, “The timing planned for new capabilities gambles that we won’t
have to confront a peer competitor.” Unless the U.S. spending and deficit projections change greatly, we can only
hope and pray that our potential adversaries will go along with that gamble. Our problem is “the U.S. fiscal
posture. The $3.8 trillion federal budget projects huge deficits - the lowest being $700 billion in 2013 – well
into the future, long after the present recession is predicted to end.” “The average addition to our national
debt will be $1 trillion annually. By 2019, the interest on the debt is predicted to be around $800 billion –
much larger than the defense budget. By 2042, if not earlier, federal revenues are expected to cover only
Medicare, Social Security and interest on the debt. All this is unsustainable.” There would be
no funds available for national defense! (Ref. 2)
“There have been many warnings in recent years about a ‘perfect storm’ threatening U.S.
defense spending. These dire predictions so far have not been taken seriously as military budgets doubled during
the past decade.
“But the storm is coming, and now it’s time to brace for a big one.
“A confluence of processes and events is creating the conditions for a severe fiscal
crisis that will affect all aspects of the nation’s finances, and the impact on defense will be more acute as
the U.S. military continues to fight costly wars.”
(Ref. 3)
By the way, European allied nations only spend from 1 to 2 percent of GDP on
defense.
“Washington has been spending at an unsustainable rate for at least a decade. Recently,
irresponsible policies have been put into over-drive. This brand of spend-and-forget politics has left us in a
precarious position." (Ref. 4)
“Washington will spend $33,880 per household in 2009 – the highest level in American
history (adjusted for inflation), and nearly $8,000 per household more than last year.
“The federal government will collect $18,277 per household in taxes. The remaining
$15,603 represents this year’s staggering budget deficit per household, which, along with all prior government
debt, will be dumped in the laps of our children.”
(Ref. 5)
“But deficits are only part of the problem. Even if we increased taxes to bridge the gap,
Washington would still be spending far too much. And far more than we – and our children – can afford.
“The President argues that record spending is needed to get us out of “the worst economic
crisis since the Great Depression.” Unfortunately, this ignores the simple fact that government can’t spend money
unless it first takes it out of the economy. Policy makers need to recognize that they can’t spend us into
prosperity.” (Ref. 4)
“If we continue down our current path, with the government picking winners and losers
with borrowed money, we will be left with reduced economic growth, fewer jobs and a higher daily cost of
living.
“To deal with the out-of-whack federal budget, we have two choices: reduce spending or
raise taxes. When you examine the data, which economists have done, it becomes clear that we have a spending
problem, not a revenue problem. In fact, in 2020, when the federal government plans to spend more than a quarter
of GDP, tax revenue is expected to be above the historical average. To balance the budget over the long-term
without reducing spending, we would need to almost double income tax rates across the board.”
(Ref. 4)
“If we were to return federal spending to what it was during the 1990s – about $21,000
per household – we could balance the budget by 2012 without raising taxes.”
(Ref. 6)
“The United States is facing an urgent fiscal crisis and the future prosperity of our
nation is at stake. We are quickly approaching the tipping point where the explosive growth in government debt
will squeeze out private investment and prevent our economy from recovering.”
(Ref. 6)
The total U.S. debt outstanding stands at $13.25 trillion.
“By the end of 2010, total US debt is projected to grow to 93% of GDP. This is above the
critical 90% threshold at which government debt significantly hampers an economy’s ability to grow. Total US debt
will surpass GDP by 2012, placing the US in league with Greece. According to former Comptroller General David
Walker, ‘Our key public debt ratios will be as bad as Greece’s in less than 10 years.’
“We are approaching the debt tipping point with each passing year. Moody’s has stated
that the U.S. credit rating could be downgraded in 2018 and maybe as soon as 2013. Moody cites the key data
point of the size of federal interest payments on the public debt as percentage of tax revenue and we are
pushing the threshold of 18-20% of revenue. CBO projects that interest would top 18% of revenue in 2018 and
20% in 2020; however, Moody’s projects that debt service could hit 22.4% of revenue by 2013. According to
Societe Generale’s economic team, we have 2-3 years to bring down these levels.
“Congressional Budget Office (CBO) data show that increased spending levels have
played a major role in producing record deficits. Above-average spending, not below-average revenues, accounts
for 92 percent of rising budget deficits by 2014 and 100 percent by 2017. Spending – which has averaged 20.7% of
GDP over the past 40 years – will surge to 25.2% of GDP by 2020 and also rise steeply thereafter.
“The expected increases in government borrowing carries a heavy economic cost. Growing
government debt crowds out private investment, raises borrowing costs, slows economic growth, and lowers living
standards. Living standards, as measured by real GDP per capita, will decline if the liberal leadership’s
current spending policies continue. The Congressional Budget Office estimates that GDP per capita would be
$3,900 lower in 2020, and over $10,000 lower by 2027.
“Every single dollar … appropriated in 2010 is deficit spending, because mandatory
spending and interest payments together exceed total revenue. This happened in 2009 as well. According to
CBO’s estimate of the President’s Budget, the $2.034 trillion in entitlement spending in 2010 and the $209
billion in interest payments on the debt will eat up all of the government’s $2.118 trillion in revenues.
“Projected interest payments to service the debt will nearly quadruple over the next
10 years. In 2011: $244 billion; In 2020: $916 billion.
“When Democrats took control of Congress in 2007, they inherited a projected ten-year
surplus of $800 billion. In just over three years, that projected surplus has turned into a ten-year projected
deficit of $9.7 trillion. This is a $10.5 trillion worsening of the budget outlook since the Democrats took
control of Congress.” (Ref. 7)
Today's world is a scary place. “Emerging powers such as China and Iran will be stocking
up on guided rockets, artillery and missiles that would be capable of sinking U.S. ships or bringing down U.S.
aircraft.” (Ref. 8) North Korea has some nuclear capability.
Iran is racing to join the nuclear weapons club. Russia's future directions are uncertain.
“China and Iran are developing ‘high end anti-access capabilities’ that would deter U.S.
weapons from entering areas where they would be vulnerable to enemy missiles.’
“The United States currently is not building new weapon systems that would counter
that anti-access threat.” (Ref. 8)
Currently, the United States has “an inventory of equipment whose service life is being
shortened further by the high tempo of ongoing military operations”
(Ref. 8) in Iraq, Afghanistan and elsewhere.
In an attempt to address this problem, the Obama administration recently unveiled a
“national security strategy, which analysts have derided as a PR document and a wish list.” Congress contributes
to the Defense Department spending problems by “saddling the Pentagon with pork-barrel projects” and “all sorts
of benefits and entitlement programs … that the Pentagon has to keep funding ad infinitum.” “The Defense
Department has had to bankroll the pension and health benefits of 5.5 million retirees. Defense Secretary Gates
has said, that ‘Military health care costs are eating the Defense Department alive.’ While the average U.S.
worker pays $3,500 a year for health insurance, military retirees pay $480 for full coverage.”
(Ref. 8)
“The Pentagon’s just-released report to Congress on Chinese military power is alarming
for two reasons: First, Beijing’s military build-up continues; second, the modernization of our armed forces may
come up short of what’s needed to meet the China challenge.”
(Ref. 1)
“The Pentagon paper talks of Chinese ‘power-projection,’ ‘anti-access’ and ‘area-denial’
strategies and forces, all aimed at keeping America at bay in Asia, should Beijing decide to do so.
“The report notes, for instance” ‘China has the most active land-based missile program
in the world’ and is sending cruise missiles on ships and intercontinental-range missiles aboard subs.
“Of particular concern to the Navy is China’s development of an anti-ship ballistic
missile with a maneuverable warhead and range of more than 1,000 miles. This DF-21 variant is a ‘carrier-buster’
and a threat our Navy has never faced.
“Now, the Defense Department tells us that Beijing could start building its own
carrier by the end of 2010. When that ship hits the water, we’ll no longer be the Pacific’s only flattop navy.
“On the aviation front, China’s upgrading its bomber fleet, arming it with long-range
cruise missiles. “(Ref. 1)
“After nine years of war, some” demand a ‘peace dividend.’ “Others are pushing for an
emphasis on counterterror/insurgency operations – a focus that diverts money from the resources needed for
conventional war.
“For example. We have 11 aircraft carriers. But due to all-sea rotations and
maintenance only seven or eight are ready for duty at a time. (We had 15 carriers during the Reagan years.)
We’re also running low on the number of Navy ships and subs.”
(Ref. 1)
“We need to win the fights we’re in now, but we need to be ready for the possible
fights to come. That means having a well-balanced force to address the contingencies we’ll face in the 21st
century, whether it is terrorism, insurgency of the rise on another major power.”
(Ref. 1)
Defense Secretary Robert Gates has directed that defense spending be focused on the
types of conflict in which America is now engaged. This is at the expense of the big-ticket major development
and procurement programs that would be needed to provide the weapons necessary to fight a major war with a
technologically advanced “peer competitor.” This focuses on the present at the expense of the future. Under
this strategy, America will be prepared only if the tomorrow is the same as today. Are we Americans
willing to bet our lives and the lives of our children on such a scenario?
“The federal budget deficit has long since graduated from nuisance to headache to
pressing national concern. Now, however, it has become so large and persistent that it is time to start thinking
of it as something else entirely: a national-security threat. [Emphasis mine]
“The budget plan released {at the beginning of 2010} by the Obama administration
illustrates why this escalation is warranted. The numbers are mind-numbing: a $1.6 trillion deficit this year,
$1.3 trillion next year, $8.5 trillion for the next 10 years combined—and that assumes Congress enacts President
Barack Obama’s proposals to start bringing it down, and that the proposals work.
“These numbers are often discussed as an economic and domestic problem. But it’s time
to start thinking of the ramifications for America’s ability to continue playing its traditional global role.
“The U.S. government this year will borrow one of every three dollars it spends, with
many of those funds coming from foreign countries. That weakens America’s standing and its freedom to act;
strengthens China and other world powers including cash-rich oil producers; puts long-term defense spending at
risk; undermines the power of the American system as a model for developing countries; and reduces the aura of
power that has been a great intangible asset for presidents for more than a century.
“’We’ve reached a point now where there’s an intimate link between our solvency and our
national security,’ says Richard Haass, president of the Council on Foreign Relations and a senior
national-security adviser in both the first and second Bush presidencies. ‘What’s so discouraging is that
our domestic politics don’t seem to be up to the challenge. And the whole world is watching.’
“In the 21st-century world order, the classic, narrow definition of national-security
threats already has expanded in ways that make traditional foreign-policy thinking antiquated. The list of
American security concerns now includes dependence on foreign oil and global warming, for example.
“Consider just four of the ways that budget deficits also threaten American’s national
security:"
“They make America vulnerable to foreign pressures.”
“The U.S. has about $7.5 trillion in accumulated debt held by the public, about half of
that in the hands of investors abroad.
“Aside from the fact that each American next year will chip in more than $800 just to
pay interest on this debt, that situation means America’s government is dependent on the largesse of foreign
creditors and subject to the whims of international financial markets. A foreign government, through the actions
of its central bank, could put pressure on the U.S. in a way its military never could. Even under a more benign
scenario, a debt-ridden U.S. is vulnerable to a run on the American dollar that begins abroad.”
“Chinese power is growing as a result.”
“A lot of the deficit is being financed by China, which is selling the U.S. many
billions of dollars of manufactured goods, then lending the accumulated dollars back to the U.S. The IOUs are
stacking up in Beijing.
“So far this has been a mutually beneficial arrangement, but it is slowly increasing
Chinese leverage over American consumers and the American government. At some point, the U.S. may have to bend
its policies before either an implicit or explicit Chinese threat to stop the merry-go-round.
“Just this weekend, for example, the U.S. angered China by agreeing to sell Taiwan
$6.4 billion in arms. At some point, will the U.S. face economic servitude to China that would make such a
policy decision impossible?”
“Long-term national-security budgets are put at risk.”
“This year, thanks in some measure to continuing high costs from wars in Iraq and
Afghanistan, the U.S. will spend a once-unthinkable $688 billion on defense. (Before the Sept. 11, 2001 attacks,
by contrast, the figure was closer to $300 billion.)
“Staggering as the defense outlays are, the deficit is twice as large. The much smaller
budgets for the rest of America’s international operations—diplomacy, assistance for friendly nations—are dwarfed
even more dramatically by the deficit.
“These national-security budgets have been largely sacrosanct in the era of terrorism.
But unless the deficit arc changes, at some point they will come under pressure for cuts.”
“The American model is being undermined before the rest of the world.”
“This is the great intangible impact of yawning budget deficits. The image of an
invincible America had two large effects over the last century or so. First, it made other countries listen
when Washington talked. And second, it often—not always, of course, but often—made other peoples and leaders
yearn to be like America.
“Sometimes that produced jealousy and resentment among leaders, but often it drew to
the top of foreign lands leaders who admired the U.S. and wanted their countries to emulate it. Such leaders
are good allies.
“The Obama administration has pledged to create a bipartisan commission charged with
balancing the budget, except for interest payments, by 2015. The damage deficits can do to America’s world
standing is a good reason to hope the commission works.”
(Ref. 9)
From Niall Ferguson in Newsweek, as quoted in
Reference 6: “This is how empires decline. It begins with a debt
explosion. It ends with inexorable reduction in the resources available to the Army, Navy and Air Force.”
The national debt has exploded and is projected to continue exploding as
long as the spending policies of President Obama and the Democratic–controlled congress are in force. The
resources available to our military are declining – aging equipment and the elimination of new weapons
procurement programs, coupled with an on-going reduction in the deployed numbers of ships, aircraft and
other military hardware. In the coming years, will America find itself defenseless against an emerging
world power armed with superior numbers of newer and more technologically advanced weapons than are available
to our armed forces? Will this be the result of uncontrolled federal spending and an unsustainable national
debt?
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References:
- China’s military muscling up, Peter Brookes, Boston Herald, Page 17,
24 August 2010.
- Defense Budget and Quadrennial Review Sidestep Critical Issues, Lawrence P. Farrell,
National Defense, Page 4, March 2010.
- ’Perfect Storm’ for Defense Is Here, For Real This Time, Lawrence P. Farrell,
National Defense, Page 4, August 2010.
- Spending Basics - Is There Really a Crisis?, Americans for Prosperity Foundation -
Spending Crisis; http://www.spendingcrisis.org/?gclid=CObers7w0qMCFeoD5QodWw4_wA,
12 August 2010 (Accessed 24 August 2010).
- How D.C. spends your taxes, Brian Riedl, Boston Herald, Page 17, 18 August 2009.
- Defense Industry and the Federal Debt, Ed Conant, National Defense, Page 6,
April 2010.
- Our Biggest National Security Threat, Congressman John Culberson - posted by Scott Gosnell,
The News; http://culberson.house.gov/our-biggest-national-security-threat/,
26 July 2010 (Accessed 24 August 2010).
- Five Key Questions About The Defense Budget, Sandra I. Erwin, National Defense,
Page 8, August 2010.
- Deficit Balloons Into National-Security Threat, Wall Street Journal,
1 February 2010.
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