Reports from the Economic Front

a blog by Marty Hart-Landsberg

Military Spending Keeps Growing

The US military empire continues to grow, and at an ever greater price tag.  At the same time the conventional wisdom is that there is not sufficient money available for accessible, affordable, inclusive national health care.

The Pentagon claims to have 865 bases, but if new bases in Iraq and Afghanistan are included the number likely tops 1000!.  “These thousand bases constitute 95 percent of all the military bases any country in the world maintains on any other country’s territory. . . . These bases do not come cheap. Excluding U.S. bases in Afghanistan and Iraq, the United States spends about $102 billion a year to run its overseas bases, according to Miriam Pemberton of the Institute for Policy Studies.”

It is worth restating this last point: we are spending more than $100 billion a year just for bases and those don’t include newly created bases in Afghanistan and Iraq.  Oh, and there is also the recently approved, with little or no debate, decision to construct “a new ’embassy’ in Islamabad, Pakistan, which at $736 million will be the second priciest ever constructed, only $4 million less, if cost overruns don’t occur, than the Vatican-City-sized one the Bush administration put up in Baghdad.”  While officially outside the base budget, embassies like these have clear military purposes.

Our overall military spending is also far larger than we realize.   John Bellamy Foster, Hannah Holleman, and Robert W. McChesney highlight this by developing their own estimate of military spending for the year 2007 (illustrated in the table below). Their starting point for this exercise is the National Income and Product Accounts.  This shows 2007 military spending at $662 billion for 2007, over $100 billion more than the military total claimed by the Office of Management and Budget in the official budget.

As Foster, Holleman and McChesney explain:

Much of the difference is explained by the fact that the NIPA numbers for national defense, as opposed to the U.S. budget figures, take account of the following: government consumption of fixed capital, cash payments to amortize the underfunded liability for military and civilian retirement benefits (which in the budget accounting are included elsewhere as “intergovernmental transactions”), and expenditures recorded on a delivery (accrual) rather than cash basis (as in the budget).

While using “full cost accounting” NIPA figures is the best starting point, more needs to be added to get an accurate assessment of actual U.S. military spending.  For example, we need to add: “military grants to foreign governments; space; medical payments to military retirees and dependents at non-military facilities; veterans’ benefits; and the net interest payments on the national debt attributable to military spending.”

As the table below shows, making the above corrections almost doubles the amount that we are officially told we spend on our military.  And although the Obama administration is calling for a slower rate of increase in military spending, actual spending on the military continues to climb.  And this is despite the fact that we already account for at least 45% of total world military spending.

We constantly debate and scrutinize spending on social programs and are told by the experts that there just isnt enough money to meet our needs.   There is no debate over and no scrutiny of our military spending, and always enough money for new interventions/occupations, bases, and weapons systems.  This is no accident but a matter of differing priorities, ones that will not be easily changed without real political struggle.

081001foster-holleman-mcchesney-table1.jpg

a) Grants to foreign governments are conservatively considered here to be eighty percent military. For instance, under the International Affairs portion of the budget $8 billion was spent in 2007 on International Security Assistance, $16 billion on International Development and Humanity Assistance, most of which were imperial expenditures.

b) Includes one-third of “Other” government social benefits category (National Income and Product Accounts, Table 3.12), defined by BEA as consisting “largely of payments to nonprofit institutions, aid to students, and payments for medical services for retired military personnel and their dependents at nonmilitary facilities.”

c) Assumes 80 percent of net interest payments attributable to military. This is less than other estimates by major analysts.

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