The US defense budget has been in the news because of its size and that fact that it will not have any cutbacks for the coming year. It also includes spending for the wars in Iraq and Afghanistan which some think controversial. Likewise some of the sovereign debt of the European countries has hit the front pages and allegedly was a major factor in the recent big decline in the Dow Jones Industrial Average. The military budget is huge of course because we have a large armed force deployed on missions around the world and in training here in the States. The budget is over 600 billion for the current year. The sovereign debts of Greece, Ireland, Portugal and Spain are large but none have even the budget of California on an annual basis.
Much is made of the fact that our military expense is the single largest item in the budget. That is technically true but might not be for long. The size of our own national debt and the money we are borrowing and projecting to borrow for the foreseeable future would indicate that soon the interest on the national debt will be the largest line item there. People and nations from around the world don’t loan us money because they love us but to make a profit and protect their money. The world economy is pretty shaky at the moment and the US dollar has shown some strength in recent days and likewise the interest rate return on the US Treasury notes and bills has dropped as world investors seek a relatively safe haven for their capital. As others have noted that fact is faint praise for the US greenback–it is like being the only girl in an Alaskan bar some would say.
Our military has served a vital and necessary role in the world since WWII. It has served that role with at least the tacit encouragement and grudging support of our “allies” around the globe. We maintained very high troop levels in Europe after the war for decades to defend those people. Even when the French or the Brits were criticizing our nuclear or military stance somewhere they and all of Europe were benefitting from our military presence to stave off the Communist aggression. The same is true for Korea and Japan and the Philippines. We would often be accused of being war mongers and fomentors by the left here and abroad but everyone sure did like our military being around. Don’t take my word for it merely check the historical record for yourself. That protective shield that we deployed literally around the world cost us precious resources all along and the friends and allies who benefitted never had to maintain the military presence they otherwise would have needed but for us being there. We were the world protectors. We still fill that role today. Rather than paying money into the UN we should be sending them a bill every year for a large portion of our defense budget.
It can be asked do we get a bigger bang for our buck out of the military or that national debt? At least the money we spend on the military has results and consequences that we can see. What do we get for the debt and the interest we pay on it? Think about that seriously. Currently the Paul Krugman types would argue that we get more jobs and a better economy with a bigger and stronger federal government regulating and commanding the show. They believe that is what we want and what is best. They would say all that debt is an investment in our future. You can hear them pontificate often on the news. They say we can worry about the size of the debt and how to pay for it down the road. We need the military. No serious and thoughtful person could argue otherwise except for the must radical peace-nik, a true Luddite approach to the military. Do we need a bigger Government, Inc. controlling ever larger and larger portions of our national economy.
All the money that is spent on the national debt is money not available for other purposes. As investors around the world start to take a hard look at the sovereign debt of Greece, Portugal etc. they will sooner rather than later begin to also look at our debt. They are worried now that some European nations may have to default on their borrowings. Moody’s has already warned that it is possible that the US debt could be downgraded. That warning got very little press coverage. With the current budget calling for more than a third of ’11 fiscal year expenditures being met with borrowed money we best consider if our potential lenders are willing to loan us that much. They might this year. But they can do basic math as well as we can and they can analyze future budget projections. It might not be long before “foreign debt” worries are what other nations and investors around the world are saying about US Treasuries.
Barcelona is apparently a nice place to visit. It is not a Spanish name however. It is traceable to Hamilcar Barcas from Carthage. When Carthage was powerful expanding in the third century BC he lead the expedition to add Spain to the domain of Carthage. He set up camp at the modern Barcelona. The camp of Barcas became Barcelona over the centuries. He was also the father of Hannibal. But that is another tale for another day.