Monday, October 13, 2008

Small Change

Today’s (October 13) Washington Post Business section carried a story whose subtitle read: “After Eight Boom Years for Spending on Military Equipment, Contractors Expect a Slowdown.”

A slowdown? One might expect a little better than that given that U.S. military spending, according to the Stockholm International Peace Research Institute (SIPRI), has increased 59% in real terms since 2001. (The Post article, using Fiscal Year data, put the increase over the same years at 86% – moving from $361 billion to $672 billion in inflation adjusted dollars) As of the end of 2007, according to (SIPRI), the United States accounted for 45% of total global military spending of $1,339 billion or $1.339 trillion.

(In case you are like me and still have a hard time wrapping your mind around a trillion of anything, the $1.339 trillion spent in 2007 comes out on a global per capita basis at $202 more or less – but who’s counting?)

SIPRI also notes that the subregion in which military spending has increased most rapidly is Eastern Europe, including the western-most republics of the former Soviet Union. If you don’t have a map handy, this latter includes the Republic of Georgia and the Ukraine, two countries seeking full membership in NATO. Georgia tried to force its secessionist province of South Ossetia back under Tbilisi’s thumb, failing totally when Russia came to the aid of the Ossetians. Moreover, Russia has warned Ukraine not to move ahead on its bid for full membership in NATO, but that warning appears not to have made any difference in Kiev or Washington.

Back to the Washington Post, another article from the Sunday October 12 paper’s Outlook section carried an article co-authored by Nancy Soderberg, U.S. ambassador to the UN during the second Bill Clinton administration. She joins Richard Danzig, a former Secretary of the Navy under Clinton, in pushing for Robert Gates to stay on as Secretary of Defense in an Obama cabinet (assuming Obama wins November 4). This would mirror Clinton’s appointment of Republican Senator William Cohn as his Defense chief in the second Clinton term.

Some right of center defense supporters are pulling not only to fight off shallow cuts but to increase defense spending as a way to help the economy grow faster. One suspects this might be happening as U.S. arms sales last fiscal year hit $33 billion plus what looks like a purposeful delay in announcing a $6.4 billion arms package to Taiwan. Why the delay? U.S. sales had been just $12 billion in FY2005; the leap to $33 billion in two years was obscene enough without pushing it to nearly $40 billion.


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