David Stockman
There is not a
snowball’s chance in the hot place of containing America’s public debt disaster
unless the Empire is brought home and the national security budget is slashed
by $500 billion per year. The merits aside, all the other big slices of the
budget led by Social Security and Medicare are surrounded by nearly
impenetrable political moats.
Fortunately, the
$500 billion savings from the national security budget is not only doable but
fully warranted on the merits. The fact is, our present bloated Empire-serving
Warfare State is not remotely necessary for homeland security and the proper
foreign policy of a peaceful Republic.
In this context,
let’s start with the sheer bloated size of the national security budget for the
current year (FY 2025). Including a 22% pro rata share of debt service
payments, the comprehensive national security budget amounts to just under $1.6
trillion.
Comprehensive
National Security Budget, FY 2025
- National defense function: $927 billion.
- International operations and aid: $66 billion.
- Veterans support: $370 billion.
- 21.7% of net interest: $210 billion.
- Total national security budget: $1.573 trillion.
- Memo: Total national security budget less allocated interest: $1.363 trillion.
When this
stupendous total is looked at in historic perspective, three things standout.
First, the end of the cold war in 1991 and the subsequent disappearance of the
heavily armed Soviet Empire into the dustbin of history left no trace on the US
national security numbers. In fact, at the peak of the Cold War in 1962 when
JFK faced down Khrushchev in Cuba the total national security budget was just
46% of the current level measured in constant dollars (FY 2025 $).
That’s right.
The 1962 national security budget for the items above (except for net interest)
stood at $640 billion just after President Eisenhower famously warned about the
dangers of the military/industrial complex in his Farewell Address. Moreover,
the FY 2025 budget (excluding the allocated interest element) of $1.363
trillion is now 68% larger than it was in 1990 on the eve of the Soviet
collapse.
That is truly
astounding. An adversary armed to the teeth with upwards of 37,000 nukes and
nearly a 4 million-man conventional armed force vanishes entirely and yet the
US national security budget keeps rising skyward without missing a beat.
Comprehensive
National Security Budgets in FY 2025 $
- 1962: $640 billion.
- 1980:$570 billion.
- 1990: $811 billion.
- 2025: $1.363 trillion.
The second key
point is that the big increase during the Cold War occurred not in the heat of
confrontation during the 1950s and 1960s but during the Reagan era of the 1980s
when the Soviet Union was already on its last leg economically and politically.
Yet between 1980 and 1990 the constant dollar national security budget soared
by +42%, from $570 billion to $811 billion.
The explanation
for this is straight-forward. During the Reagan Era the neocons hijacked the
Republican party and cast its historic fiscal prudence to the winds, including
in the defense area. They even claimed that massive defense increases were
needed because the Soviet Union was on the verge of a nuclear first strike
capacity.
That latter was
an abject lie as proven by the fact that less than 10% of the Reagan defense
build-up went to the strategic nuclear arsenal. By contrast, the overwhelming
share was allocated to conventional forces including the 600-ship Navy, massive
increases in air power assets, new generations of battle tanks and armed
personnel carriers, and an extensive expansion of air and sealift capacities,
cruise missiles and electronics warfare capabilities. All of these latter
forces had only one purpose – the conduct of wars of invasion and occupation in
a world in which the US was not threatened in the slightest by an industrial
power with expansive land-based and other conventional warfare capabilities.
Without ever
articulating it explicitly, therefore, the real effect of the Reagan defense
build-up was to supply future administrations with the military wherewithal to
launch endless adventures in Regime Change. That is to say, the Forever Wars
from the First Gulf War onward were enabled by the Reagan build-up and provided
the military spending and weapons base for their conduct during the post-Soviet
era. That is, when real defense spending should have been cut back by at least
half to $400 billion (FY 2025 $) after 1990 it was actually expanded by another
70% to fund endless adventures in regime change and global intervention.
Thirdly, the
Forever Wars have been a physical, medical and fiscal disaster. Currently 5
million wounded veterans receive disability compensation and 9 million receive
health care benefits. The overwhelming share of these are owing to vets who
served in the Vietnam War and the Forever Wars which followed.
Accordingly,
what needs be described as the “deferred cost” of Empire has literally shot the
moon. In constant dollars, Veterans benefits have risen from $57 billion in
1962, mainly representing WWII veterans, to $370 billion. This 6.5X rise
represents the frightful human and fiscal tab for Vietnam and the Forever Wars.
Constant Dollar
(FY 2025 $) Veterans Benefits:
- 1962: $57 billion.
- 1980: $72 billion.
- 1990: $69 billion.
- 2025: $370 billion.
So the question
recurs. How did a peaceful Republic secure behind the great Atlantic and
Pacific Ocean moats, which until 1948 eschewed permanent “entangling alliances”
abroad consistent with the wisdom of Washington, Jefferson and the Founders,
end up with an global Empire and massive Warfare State budget that it doesn’t
need and can’t any longer afford?
The answer, we
believe, lies in three strategic mistakes made on the banks of the Potomac in
1917, 1948 and 1991, respectively, that have enabled the rise of a destructive
Empire and its self-fueling Warfare State fiscal monster. Of course, the latter
can only be eliminated by returning to Jefferson’s admonition that America
should pursue –
Peace, commerce
and honest friendship with all nations, entangling alliances with none.
First and
foremost, Woodrow Wilson’s intervention in the Great War was a calamitous
mistake. The liberty and security of the American homeland was not remotely
threatened because by that point in time the German Fleet was locked-up in its
Jutland home-port by the Royal Navy and all sides to the conflict were running
out of draftable men, materiale, morale and fiscal resources.
Accordingly, on
the date Congress declared war in April 1917 there was not even the slightest
chance of a German attack on America. Yet Wilson plunged the US into the
stalemated war of the old world for the vainglorious purpose of acquiring a
powerful seat at the post-war peace conference. That misguided purpose, in
turn, tipped the balance on the Western Front to a victory of the Entente
powers led by England and France.
The arrival of
two million fresh American doughboys and massive flows of armaments and loans
from Washington thus enabled a vindictive peace of the victors at Versailles.
Consequently, the end to a pointless world war that would have left all the
sides exhausted, bankrupt and demoralized, and their respective domestic “war
parties” subject to massive repudiation at the polls – simply planted the seeds
for the even more destructive and calamitous second world war which followed.
Wilson’s foolish
intervention on the stalemated battlefields of the Western Front thus gave
birth to Lenin and Stalin when the Russian Empire collapsed in a last futile
offensive during 1918. Likewise, his machinations with the victors at
Versailles and their carving up of Germany fostered the stab in the back and
revanchist myths on which Hitler rose to power.
More importantly
still, the alleged “lessons” of the interwar period and WWII were falsely
played and replayed in the years after 1945. To wit, the Wilson-enabled and
wholly aberrational rise of Hitler and Stalin did not happen because the good
people of England, France and America slept through the 1920s and 1930s. These
monsters of the 20th century were not resident in the DNA of nations nor are
they continuously lurking among the lesser tinpots who rise from time to time
to authoritarian power among the far flung nations of the world.
So there was no
baseline case for Empire as a necessity of America’s homeland security. The
permanent Washington based-Empire of bases, alliances, collective security and
relentless CIA meddling in the internal affairs of foreign countries that arose
after 1945 was therefore the second unforced error – one that flowed from
Wilson’s first.
For a brief
moment after WWII ended, in fact, massive US demobilization did occur and the
ground was laid for a return to the pre-1914 policy of no entangling alliances.
That is to say, there was a shot to encapsulate Wilson’s error to a brief
interval encompassing the wars of 1917 to 1945.
To that end, the
massive post-war reduction in the military establishment and budgets tell you
all you need to know. The US armed services manpower peak of 12 million active
duty personnel in 1945 had been reduced to just 1.47 million by 1948.
In terms of
dollars, defense spending peaked at $83 billion in 1945 but had plunged to just
$9 billion by 1948. Moreover, when translated into FY 2025 constant dollars,
the magnitude of the demobilization becomes crystal clear: Constant dollar
spending dropped form $1.7 trillion in 1945 to just $125 billion in today’s
purchasing power by 1948.
So the
accidental Warfare State fostered by Woodrow Wilson’s foolishness was truly
being dismantled and the rudiments of wartime Empire were being brought home.
There had been, in fact, no provisions in Washington’s wartime policy for
permanent bases abroad or alliances among the victorious nations.
That should have
been the end of the matter in 1945, and, in fact, the world was almost there.
After the victory parades, demobilization and normalization of civilian life
proceeded apace all around the world.
Alas,
Washington’s incipient War Party of military contractors and globe-trotting
operatives and officialdom gestated in the heat of World War II and fattened on
$1.7 trillion of war spending was not about to go quietly into the good night.
Instead, the Cold War was midwifed on the banks of the Potomac when President
Truman fell under the spell of war-hawks like Secretary James Byrnes, Dean
Acheson, James Forrestal and the Dulles brothers, who were loath to go back to
their mundane lives as civilian bankers, politicians or peacetime diplomats.
We will amplify
that baleful development in Part 2, but suffice it here to highlight the
crucial turning point. As the now open archives of the Soviet Union make clear,
in the post-war period world communism was not really on the march and the
nations of the world were not implicated in falling dominoes or gestating
incipient Hitler’s. But the new proponents of Empire insisted they were just
the same, and that the national security required the far-flung empire that
still needlessly burdens the nation today.
Yet there was
always an alternative. That is, a return to the policy of no entangling
alliances and a homeland security strategy of Fortress America. The great
Senator Robert Taft of Ohio advocated this alternative brilliantly in his
losing campaigns during the 1940s and 1950s to sustain a Republic, not an
Empire on the North American continent.
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