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Our Foreign Policy is a Failure

When discussing lowering the defense budget, many fall into accepting a false dichotomy: on one side is spending more than the next ten countries; each dollar removed from this ideal represents an incremental move towards the side containing all imagined dangers.

Contrarily, the connection between spending and American safety is not always so directly positive, with our often incendiary and erratic foreign policy leading to anti-American sentiment abroad and continued military entanglements. During the earliest days of this pandemic, when supplies were at a premium and the expensive intelligence was without value, even those without a great imagination could see the opportunity costs of this expenditure.

The Great Lie

According to the Brookings Institute, those people who believe $714 billion, 2020’s defense budget, is too much for a nation to spend are not looking at the historical context.

While $714 billion is substantially impressive, the spending as a percentage of the Nominal GDP has dropped since the Cold War.

In the past 3 years, our defense budget has hovered around 3% of the overall GDP, while defense spending in the 1960s was closer to 8-9%.

Given those facts and their presentation, one has to wonder if Brookings is actually just a propaganda mill funded by foreign powers.

Military Spending - Our World in Data

As the 2018 National Defense Strategy envisions, the United States must “maintain a strong nuclear deterrent; protect the homeland from attack by missiles, aircraft, terrorists, and others; defeat China or Russia in conventional combat, and deter North Korea while doing so; and sustain momentum in the “war on terror.”

All that muscle for only a few percentage points worth of GDP can’t be wrong, right?

Despite the Brookings argument that America should be thankful for the bang-per-buck they receive – they’re not.

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What is causing the American people to so ungratefully snub their noses at this great value?

In addition to wanting to end the War on Terrorism because of the amount of innocent people who have been killed in its wake (some estimate 12 million people have been killed and 37 million displaced), Americans might be getting suspicious about the health of our economy.

While the Nominal GDP indicates a healthy and growing economy, when adjusted for inflation, we see the graph below:

Converting Nominal to Real GDP | Macroeconomics

When we adjust for inflation, we’re seeing a far flatter incline than the commonly reported Nominal GDP. Using the Nominal GDP as a gauge for spending has failed because the perceived spending permitted by the GDP doesn’t accurately reflect the value of the dollar taken from the taxpayer.

At the peak of “Defense Spending per GDP,” we also see that corporate America provided a much larger percentage of the total tax revenue than during our more recent campaigns. The result is that the American taxpayer shoulders the blame in wars largely entertained for corporate interests. Finally, this money the American taxpayer spends to the American war industry goes into the GDP – where it justifies more spending.

In 1962, the defense budget was $54 billion (out of $605 billion GDP). Adjusted for inflation, that’s $473 billion today. Our 2020 defense bill was $714 billion. The American taxpayer is spending more than we did in 1962 by a good deal, experiencing inflation and slowed growth, and is burdened with the costs of foreign adventurism while corporations benefit without their previous risk.

To do all this in the absence of the Soviet Union, and with largely contrived threats – well, that is American exceptionalism.

Written by Marley

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