You are herecontent / Guns and Butter (Again)
Guns and Butter (Again)
When you stop to think about it, people measure how well their lives are going not by their absolute state of being but by their situation relative to their expectations. For example, a poor person in a developing country may be ecstatic about getting a pair of shoes for the first time; in contrast, a billionaire may commit suicide after he loses $100 million in a down market.
The same is true for nations. The American elite has enjoyed the United States’ dominant status in the world since World War II and became thoroughly drunk with U.S. superiority in the last two decades after the demise of the Soviet Union left the country as the only superpower. This elite is resistant to accepting the reality that a multipolar world will soon be at hand.
This reality will arrive much sooner if the U.S. does not retract its informal overseas empire, reduce the bloated defense budget, and act with more humility overseas. Even before the U.S.-led global financial meltdown, the far-flung U.S. empire of overseas military bases, U.S.-dominated alliances, and profligate military meddling in other nations’ affairs was terribly overextended. The U.S. accounted for 20 percent of the world’s GDP but 43 percent of its defense spending.
Yet like the elites of the British and French Empires, which became exhausted by being on the winning side of two world wars, the U.S. elite refuses to realize that the country needs to retract its cost-ineffective empire if it wants to avoid demise as a great power. After being occupied by the Nazis through much of World War II, the French ignored their post-war financial precariousness and tried to rekindle their imperial glory by retaking Indochina. When the spent French were not up to the task in the mid-1950s, Harry Truman and his successors made the foolish commitments for the United States to finance them, assist them, and later take over for them. Reluctant even then to give up their colonial mindset, the French then tried and failed to militarily suppress Algerian independence in the 1950s and 1960s.
Similarly, the British attempted to keep their Middle East dominance long after the sun had set on the British Empire. Even after their ill-fated invasion of Egypt in 1956—with the help of Israel and the irrepressible France—the British didn’t pull back from the Middle East until the early 1970s.
Currently, the United States has its finger in the dike in two pointless nation-building quagmires in Iraq and Afghanistan, while Osama bin Laden is most likely in Pakistan and the U.S. is being severely debilitated by an economic meltdown at home. Of course, Barack Obama was not responsible for any of this mess but may become captive of the interventionist U.S. elite in trying to deal with these calamities.
Economically, the Bush/Obama period ominously resembles the Hoover/FDR period, when a common recession was converted into a Great Depression by interventionist government policies that refused to let natural market mechanisms bring the country out of the economic slump. Let’s hope the current economic calamity doesn’t get this bad; but that we can no longer afford to maintain an extensive overseas empire hasn’t yet seemed to sink into the minds of the U.S. elite.
Another historical parallel is the Vietnam period, when Lyndon Johnson tried to run a guns-and-butter policy—funding the Vietnam War and expanding the government’s reach domestically by funding Great Society programs. Now, the Bush/Obama governments are trying to fund two wars while also spending at least $1.5 trillion to trick American consumers into thinking the government can save them from an inevitable recession—all the while making that downturn worse. On top of that, the bulge of baby boomers will soon begin retiring, thus putting pressure on collapsing Social Security and Medicare systems. During Vietnam and the Great Society, LBJ honestly—if irresponsibly—funded the ballooning government with a 10-percent surtax on corporate and income taxes. No such honesty has come from the Bush administration, as it cut taxes while raising federal spending dramatically. Now that an economic meltdown has occurred, Obama is understandably reluctant to increase taxes—and has proposed lowering them further—while continuing Bush’s spending spree to try to fool the country out of its economic collapse.
So we are staring trillion dollar budget deficits in the face. The federal budget is $3.1 trillion dollars a year but two-thirds of that is on autopilot—that is, guaranteed payments to people regardless of economic conditions under Social Security, Medicare, Medicaid, Food Stamps, and unemployment compensation or interest payments on the already staggering national debt.
Of the $1.1 trillion that can be more easily altered (discretionary spending), more than half of that is the monstrous defense budget. Thus, defense spending should and will eventually become a big target for Obama’s promised future fiscal restraint. Obama has good instincts on withdrawing from Iraq but is slowly being co-opted by the foreign policy elites and military bureaucracy. His instincts on Afghanistan are likely to be “unhelpful.” He wants to double down on a nation-building conflict that is stoking Islamist fundamentalism and will be much harder to “win” than Iraq (although the U.S. hasn’t won Iraq by a long shot).
Obama needs to wise up, totally withdraw from both Iraq and Afghanistan, focus on finding bin Laden in Pakistan, withdraw from the U.S. Empire, and dramatically slash the U.S. defense budget. The U.S needs to take this revolutionary tack as one step toward renewing what is still the world’s largest economy—that on which all indices of U.S. national power ultimately depend. The U.S. can still be an economic superpower and have much influence in the world, but the days of being a globe-girdling military power are over. The U.S. foreign policy elite just hasn’t accepted it yet.
Ivan Eland is Senior Fellow and Director of the Center on Peace & Liberty at The Independent Institute. Dr. Eland is a graduate of Iowa State University and received an M.B.A. in applied economics and Ph.D. in national security policy from George Washington University. He has been Director of Defense Policy Studies at the Cato Institute, and he spent 15 years working for Congress on national security issues, including stints as an investigator for the House Foreign Affairs Committee and Principal Defense Analyst at the Congressional Budget Office. He is author of the books, Recarving Rushmore: Ranking the Presidents on Peace, Prosperity, and Liberty, The Empire Has No Clothes: U.S. Foreign Policy Exposed, and Putting “Defense” Back into U.S. Defense Policy.