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The Snowball of Empire

Mises Daily: Friday, February 17, 2012 by

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Those of us who spent our younger years living in the coldest of the 50 states remember fondly those afternoons spent at play just after a fresh coat of snow blanketed the ground. We'd grab our jackets and gloves, run out of the house, and convene at the nearest large field (perhaps the backyard) and bask in the winter wonderland presented to us only sporadically during those very cold months.

Snowball fights, snowmen, and creating igloos were among some of the activities we'd all partake in; merrily disregarding frostbite to salvage one more minute outside.

But one activity among them all sticks out to a great number of us.

It was the simplest of games, yet always one of the most fun. When there was enough snow on the ground, everyone from the neighborhood or school would compete to try and roll the largest snowball.

As with all things, it would start out small; one kid packing a handful of snow and rolling it along the ground adding more and more snow with each cycle. A few minutes would go by and eventually the ball would be up to his knees — a few more, his waist.

Eventually the ball, given there was enough space and snow, would be too large for one child alone to manage, so he'd call over a friend and they'd push it until it was again too large to push. They'd call over another friend, and another, and another, until after awhile there were five to ten people trying to push the snowball, now towering way atop their heads.

The game always ended the same way, though. It always ended when the snowball, no matter the manpower, could no longer be pushed. It would forever remain in place, week after week, perhaps month after month, until warmer days came around to melt it away. It was always the last remnant of winter to disappear.

In many ways the United States' foreign policy is much like that winter snowball game.

At the beginning it started small and unpretentious like that first handful of snow. Our smartest of the Founding Fathers advocated for a humble foreign policy: "Peace, commerce, and honest friendship with all nations," said Thomas Jefferson, "entangling alliances with none." And for about a century, it remained this way.

But with the dawn of the 20th century, and the Industrial Revolution in full swing, things began to change.

The snowball began its first cycle in 1899 when on February 4 of that year the United States began a war against the Philippines. Two days later the Senate voted to annex the country despite the islanders' opposition. That country would not be returned to its people until 1934.

Not 20 years later, in 1917, America decided to enter World War I, forgoing Jefferson's plea to avoid entangling alliances, and, as a result, lost roughly 116,000 men, and millions of dollars, in the war.[1]

The snowball kept rolling with World War II, perhaps the only just war of the century, but as a result, our role in world affairs dramatically changed and NATO was formed in 1949. NATO was the ultimate entangling alliance — forever ensuring our seat at the table of any just or unjust future war.

The rest, as they say, is history. The snowball has been rolling full speed ahead ever since, creating an empire that is both all encompassing and pervasive.

Korea, the Soviet Union, Vietnam, Iran, Iraq, Pakistan, Somalia, Bosnia, Kosovo, Iraq again, and Afghanistan: the United States has had military personnel in (or engaged with) all these countries at one point or another throughout the past 50 years, and today is responsible for over 600 military bases in 40 countries across the world.[2]

As the Department of Defense states, "the United States military is currently deployed to more locations than it has been throughout history."[3]

The snowball, which started out as a flake, has now reached Leviathan status and is on a downward slope growing larger and larger with every revolution. The empire of the United States now touches every country, directly or indirectly, in the entire world.

But sooner or later the slope is going to level and the snowball is going to roll more slowly. By that time, however, the ball will have become so large that the mechanisms that have supported it for the past century will no longer be able push it forward and it will as a result remain stagnant and eventually melt away.

The United States has been lucky. For the past decade or so China has taken on the role of the "strong guy" in the neighborhood, helping us to move the snowball farther and farther through loans and debt when we could no longer do so ourselves.

Today China is the largest owner of US Treasury securities in the world, accounting for roughly 25 percent of all foreign owners, or roughly $1.15 trillion.[4] Without China lending us money, our current foreign policy could not exist.

If, or when, the snowball stops, it will be largely due to America's inability to afford it.

As of the writing of this essay, the United States is currently $15.2 trillion in debt. That is about $48,000 of debt for every man, woman, and child living with United States citizenship regardless of age.[5] A baby is born with $48,000 worth of debt before it even takes its first fresh breath of air, and this number does not account for the interest on that debt, which is much, much more.

The total budget request by the president for 2012 alone is roughly $3.729 trillion — $1.1 trillion more than the government's total requested revenue for the same fiscal year.[6]

And of that $3.729 trillion, $553 billion is allocated for defense spending — a $20 billion increase from 2010 and $150 billion more than what was spent during the height of the Cold War in 2012 inflation-adjusted dollars.[7]

But, what do all these numbers mean, one might ask?

They mean

  1. we have no money and thus depend on additional taxes, borrowing, or printing of money to finance and run our country, and
  2. we're spending a lot of money we don't have on the military.

The common responses to these two understandings are unfortunately too often the same: that we are engaged in one war and ending another abroad, and our world is becoming an increasingly dangerous place, necessitating an expansion of defense (or war) spending.

Thankfully, however, this is just not true. If one adds up all the military spending combined for the entire world, the United States accounts for 48 percent of it. The next-closest spender? Our NATO allies with 20 percent. After NATO, the next-largest spender is China, whom we outspend more than five to one, with 8 percent.[8]

And in the case of Iran, for whom the war drums are being beaten ever louder, their entire annual military budget — $7 billion or $12 billion, depending on whom you consult — accounts for around 2 percent of our annual military budget. And if they increased their military expenditures by 127 percent, as some are reporting, that would still put them at less than 4 percent.[9]

To put it bluntly, America has some individual citizens who make more money than entire countries spend on defense. No matter which way you look at it, America simply spends too much money on its military for there to be any conceivable physical threat to our country, despite what politicians might suggest to the contrary.

But just because we spend a lot of money on the military and there is no legitimate outside threat to our country does not mean we are safe and stable. As a matter of fact, the very spending we do to keep ourselves safe might very well account for our nation's greatest threat.

With so much spending on wars and empire, the United States is on the verge of suffering from an economic collapse similar to the one Greece experienced in the spring of 2010 and continues to experience as a result of excessive debt spending in social arenas.

Just listen to Alan Greenspan, the king of debt ignorance, when he said in June of 2010 in a Wall Street Journal article that "The United States, and most of the rest of the developed world, is in need of a tectonic shift in fiscal policy. Incremental change will not be adequate." And also his successor as Federal Reserve chairman, Ben Bernanke, who said in a June 2010 House Budget Committee hearing that "The federal budget appears to be on an unsustainable path."

These words come from the men who run our economy and dictate our monetary policy, and their words are crystal clear: if America does not start curtailing the spending and rethinking the path it's chosen of limitless borrowing and printing of money, it may very well suffer the economic collapse that spelled destruction for nearly every other empire of its time, including Rome and the Soviet Union.

All great empires end for two reasons, overexpansion and economic collapse (usually intertwined). Very rarely does an empire end for external reasons, and why should we judge America to be an exception? As Harvard's Niall Furguson states, "Imperial collapse may come much more suddenly than many historians imagine. A combination of fiscal deficits and military overstretch suggests that the United States may be the next empire on the precipice."

If there is any place in our budget where we can make an immediate impact on our deficit, it is in defense spending, because, when it comes to the military, our government shows no fiscal restraint. It spends more than $1 million per soldier per year in Afghanistan, while the enemy, which has sustained the war for 11 years (our nation's longest) spends far less.[10]

It spends roughly $106 million on a missile defense system — for Europe; it allocates 40,000 American soldiers to defend the border — of South Korea. [11]

And on a separate, yet relevant, note, the Iraq war in 2003 was estimated to cost the United States $50 to $60 billion, yet, as of 2008 the war had already cost 12 times that.[12] That is roughly $600 billion — not to mention the cost in lives. It was a gross miscalculation and a perfect example of America's lack of fiscal restraint in military spending.

Like it or not, the giant snowball that is our foreign policy is rolling to a halt after decades of forward expansion. China, the strong man on the block, will not for very much longer be able to keep it rolling forward, and all that country has to do to destroy our currency and country is call in our debt.

The issue is no longer red versus blue, liberal versus conservative, or poor versus wealthy. No matter your stance on the war or on defense budgets, we must listen to those, such as Bernanke, who say the spending must stop and our debt must be eliminated.

In order to do this, our interventionism and nation building across the world must also come to an end; it is the greatest threat to our national security. If we continue to fund an empire we cannot afford, we leave our economy vulnerable and our wealth dependent on other nations.

If America desires to remain a player on the world's stage, we must adopt a humbler, and more affordable, foreign policy in line with the wisdom of Jefferson. Remember, it was also Jefferson who said that "Peace is our most important interest, and a recovery from debt:" Two interests we as a country, in pursuing our foreign policy, have foolishly ignored.

As winter wanes and the sun rises higher in the sky, daylight is being shed on America's defective foreign policy. The snowball of empire is finally coming to a screeching halt and soon no outside actors will be able to help push it forward.

Even those who stood in ignorance for many years are recognizing this truth. Will America be able to withstand the summer heat or will it trudge on in ignorance as if winter never ends? Nobody knows for certain.

Only time will tell whether America will last through the summer, or fall, only to rise in a different place and in a different form next winter.

Notes

[1] Congressional Research Service. 2010. American War and Military Operations. Casualties: Lists and Statistics. 7-5700 www.crs.gov RL32492.Download PDF

[2] Dept. of Defense. 2011. Base Structure Report, FY. 2011 Baseline. Dept. of Defense.Download PDF

[3] Dept. of Defense. 2001. Base Structure Report, FY. 2001 Baseline. Dept. of Defense.Download PDF

[4] Department of Treasury/ Federal Reserve Board, "Major Foreign Holders of Treasury Securities." United States Department of Treasury.

[5] "U.S. National Debt Clock : Real Time," U.S. National Debt Clock : Real Time.

[6] "Fiscal Year 2012 Budget of the U.S. Government," White House Budget.Download PDF

[7] "FY 2011 President's Budget — Historical Tables," The White House.

[8] Christopher Hellman, "Center for Arms Control and Non-Proliferation: The FY 2009 Pentagon Spending Request — Global Military Spending." Center for Arms Control and Non-Proliferation.

[9] See "The SIPRI Military Expenditure Database" from the Stockholm International Peace Research Institute and "Iran Plans 127 Percent Defense Budget Increase" from the Defense News.

[10] Christopher Drew, "High Costs Weigh on Troop Debate for Afghan War," New York Times — Breaking News, World News & Multimedia.

[11] "Briefing by Defense Secretary Gates and ROK Minister Lee," America — Engaging the World — America.gov.

[12] David M. Hersenzhorn, "Estimates of Iraq War Cost Were Not Close to Ballpark," New York Times — Breaking News, World News & Multimedia.