Dismantling the Empire

Missing as well from this compilation is $1.9 billion to the Department of Justice for the paramilitary activities of the FBI; $38.5 billion to the Department of the Treasury for the Military Retirement Fund; $7.6 billion for the military-related activities of the National Aeronautics and Space Administration; and well over $200 billion in interest for past debt-financed defense outlays. This brings U.S. spending for its military establishment during the fiscal year 2008, conservatively calculated, to at least $1.1 trillion.

MILITARY KEYNESIANISM

Such expenditures are not only morally obscene, they are fiscally unsustainable. Many neoconservatives and poorly informed patriotic Americans believe that even though our defense budget is huge, we can afford it because we are the richest country on earth. Unfortunately, that statement is no longer true. The world’s richest political entity, according to the CIA’s “World Factbook,” is the European Union. The EU’s 2006 GDP (gross domestic product—all goods and services produced domestically) was estimated to be slightly larger than that of the United States. However, China’s 2006 GDP was only slightly smaller than that of the United States, and Japan was the world’s fourth richest nation.

A more telling comparison that reveals just how much worse we’re doing can be found among the “current accounts” of various nations. The current account measures the net trade surplus or deficit of a country plus cross-border payments of interest, royalties, dividends, capital gains, foreign aid, and other income. For example, in order for Japan to manufacture anything, it must import all required raw materials. Even after this incredible expense is met, it still has an $88 billion per year trade surplus with the United States and enjoys the world’s second-highest current account balance. (China is number one.) The United States, by contrast, is number 163—dead last on the list, worse than countries like Australia and the United Kingdom that also have large trade deficits. Its 2006 current account deficit was $811.5 billion; second-worst was Spain at $106.4 billion. This is what is unsustainable.

It’s not just that our tastes for foreign goods, including imported oil, vastly exceed our ability to pay for them. We are financing them through massive borrowing. On November 7, 2007, the U.S. Treasury announced that the national debt had breached $9 trillion for the first time. This was just five weeks after Congress raised the so-called debt ceiling to $9.815 trillion. If you begin in 1789, at the moment the Constitution became the supreme law of the land, the debt accumulated by the federal government did not top $1 trillion until 1981. When George Bush became president in January 2001, it stood at approximately $5.7 trillion. Since then, it has increased by 45 percent. This huge debt can be largely explained by our defense expenditures in comparison with the rest of the world.

The world’s top ten military spenders and the approximate amounts each country currently budgets for its military establishment are:

  1. United States (FY08 budget), $623 billion

  2. China (2004), $65 billion

  3. Russia, $50 billion

  4. France (2005), $45 billion

  5. United Kingdom, $42.8 billion

  6. Japan (2007), $41.75 billion

  7. Germany (2003), $35.1 billion

  8. Italy (2003), $28.2 billion

  9. South Korea (2003), $21.1 billion

10. India (2005 est.), $19 billion

World total military expenditures (2004 est.), $1,100 billion

World total (minus the United States), $500 billion

Our excessive military expenditures did not occur over just a few short years or simply because of the Bush administration’s policies. They have been going on for a very long time in accordance with a superficially plausible ideology and have now become entrenched in our democratic political system, where they are starting to wreak havoc. This ideology I call military Keynesianism—the determination to maintain a permanent war economy and to treat military output as an ordinary economic product, even though it makes no contribution to either production or consumption.