Big Debts For Big Guns


Wars cost a lot of money, and the United States ran out of the readies a long time ago.

This year, the Congressional Research Service estimates (pdf) the cost to the US taxpayer of the wars in Iraq and Afghanistan will reach US$1.08 trillion. That figure is not so far off the US budget deficit for 2010 — US$1.42 trillion.

You could be excused for wondering how the United States can afford such a venture. Even members of Congress have become uneasy about the costs of war, stalling the approval of another $33 billion in new war funding as the conflict in Afghanistan stretches out to become the longest war in US history. It’s not just doubt about the prospects for success in Afghanistan that underpin the hesitation of Congress. It’s also the incredible pressures bearing down on every other department and spending area in light of the swelling deficit.

In total, US national debt now stands at over $13 trillion, fast approaching 100 per cent of GDP. Several developed nations already exceed this level of indebtedness, most notably Japan with a national debt of 170 per cent of GDP. Debt alone does not equal catastrophe.

The United States military budget is a significant factor in the country’s budget problems — but it is not the only one. Soaring Medicaid costs are one area that has been singled out for attention by critics. US Military spending nonetheless adds up to upward of half of discretionary spending and 18 per cent of the total budget.

Overall, spending on the US armed forces approaches 5 per cent of the country’s GDP. At $663 billion, the American military budget is by far the largest in the world, but expressed as a percentage of GDP it is midway between relatively peaceful countries like Australia (at around 2 per cent) and more belligerent/beleaguered nations like Israel and Saudi Arabia (around 8 per cent).

Globally, military spending averages 2.4 per cent of GDP. How can we put this figure in perspective? The Stern Review on the Economics of Climate Change estimated that stabilisation of CO2 levels at 550ppm would cost the world 1 per cent of GDP.

There is, clearly, political will around the world to fund defence budgets against wars that may never happen — and a thoroughgoing unwillingness to pay for mitigation against a threat that certainly will. The reasons for this contrast are not merely ideological or geopolitical, they are also institutional. All governments have sizeable and continuous defence departments that lobby for funding and compete with each other, backed up by established commercial interests in the armaments industry. Compare this to the relatively recent and often fragmented institutional and industry support behind climate change mitigation.

In his Farewell Address delivered in 1961, Dwight Eisenhower warned Americans to "guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex." It was Eisenhower who popularised the term "military-industrial complex" and the armaments industry combined with state defence bureaucracies have since continued to exert a powerful influence on government.

But is that power increasing relative to other influences? At the end of the Cold War military spending in the US stood at over 4 per cent of GDP. At the time Eisenhower issued his parting warning the United States military budget was nearly 10 per cent of GDP.

Now, it is less the size or proportion of spending in itself that is controversial but the fact that the spending occurs within the context of an economy in recession. Under these conditions, one might expect that opposition to armaments and the industrial-military complex would grow. Yet there is little evidence that this is taking place. Defence budgets, including those in Australia, are probably the safest areas of government expenditure the world over. Military spending is, politically speaking, something of a sacred cow.

Military prowess is a matter of national pride not only for great powers like the United States, but also for small countries like Australia. Even at times of financial pressure, the military often succeeds at casting itself as a special case.

The UK Department of Defence certainly feared the axe promised by the new Conservative-Liberal government in future budgets — yet defence spending has been quarantined from the first round of cuts. To defend its bottom line, Defence didn’t just use national security arguments but also connected its welfare with the pressing issues of the day.

So, for example, the UK defence industry lobby warned that a squeeze on its industrial wing could jeopardise economic recovery. Even climate change has been raised as a reason for more military spending — particularly in view of the failures at Copenhagen. The Pentagon has already warned its government that climate change will bring heightened security risks as global wars over resources become more likely. Whether the critique of defence budgets is economic or environmental, the military-industrial complex has an answer.

Weak states also require a strong military. At a time when so much state capacity and social solidarity has been hollowed out by neoliberal market reforms and service privatisation, the military has increased its importance as a reserve of manpower and expertise in emergencies. Powerless citizens expect the state not only to defend them against national enemies, but against natural and manmade disasters like hurricanes and oil spills. The involvement of the military in civilian operations such as internal security and reconstruction further blurs the line between military and civilian spending — and makes it easier to justify. In the same way, global military presence in Afghanistan can be framed not merely as a "war", but as a "reconstruction effort".

Wars are expensive — but nations are also far more than their balance sheets. They are also imagined entities where the projection of power is just as essential in the mind as it is on the ground.

America may be like the man who owes millions to creditors — but so long as people are willing to underwrite his debt, he will go on spending. As long as we can imagine defence spending is worthwhile, we will put up with it. American voters underwrite the war, in other words.

The public announcement of the discovery of a trillion dollars worth of unobtainable but nonetheless tantalising mineral resources in Afghanistan should be seen in this light. President Obama claimed ownership of the Afghan mission on coming to office, and the appearance of defeat in Afghanistan is something his administration and the United States may want to avoid even more than an ever-expanding deficit.

Launched in 2004, New Matilda is one of Australia's oldest online independent publications. It's focus is on investigative journalism and analysis, with occasional smart arsery thrown in for reasons of sanity. New Matilda is owned and edited by Walkley Award and Human Rights Award winning journalist Chris Graham.