Economic Defense
Using the Military to Defend Against the Economic Threat
by William D. O'Neil
America's defense forces are far and away the world's largest and most capable. Today the most severe threat we face is economic rather than military in nature, but the strength of the military can be turned against this too.
The immediate economic threat is a severe recession that could all too easily become another great depression. The reason it is so dangerous is that the financial collapse that accompanied it has all but wiped out lenders. In ordinary recessions the Federal Reserve and other nations' central banks can provide strong stimulus by loosening constraints on lending, but now there is scarcely anyone in a position either to lend or borrow. The only alternative is to put money directly into the economy through government action. The government can in effect create more money and spend it to put people to work to produce and consume more.
When wars have come in the past the armed services have generally had to add a great many personnel very quickly, and they possess very effective means to do so. They also have to train the new troops rapidly and well. We can use those mechanisms today to arm ourselves to fight recession by recruiting large numbers of young people and training them in the skills that will be in demand when the economy recovers. While they are in service their pay will flow out into the economy, and the program will employ many others to train, support, and house them. At the same time we can hire people to do a great deal of essential but undone repair and maintenance work on our military bases. In certain selected cases we can increase production of equipment and matériel for which we will have a real and continuing need and which we might as well stockpile now.
The details of such a program are outlined in a backup paper on what I am calling MilPlan. Calculations show that the training program alone could put half a million people to work.
The costs of this program are minimized because it will generate income -- probably $1.50 or so for every budget dollar spent -- some of which will return in the form of taxes. But inevitably, these and other efforts to revive the economy will pile more debt on top of the nearly $5 trillion in federal debt amassed between 2001 and 2008. When the immediate crisis is past it will be essential to quickly cut federal expenditures so we can restore the government's solvency and capacity to act when it needs to.
It is important not to weaken our defenses dangerously in the course of reducing federal spending, following return to full employment. But we cannot afford to neglect the danger that our $10+ trillion debt poses to our security as well.
We spend about as much today on defense as all the rest of the world together. We can be secure while spending less, if we spend wisely. We do need forces to help in combating the unrest that can foster terrorism and other threats, as well as to deter and respond to irresponsible actions by regional powers such as Iran or North Korea, but we do not need to spend $700 billion per year to meet these needs adequately.
To secure ourselves against the possible future emergence of large, aggressive "peer competitors" like the the former Soviet Union we do not need to maintain massive forces today. China's defense spending today is only about one fifth as much as ours, at most, and no one else comes close even to that level.
We can best prepare ourselves against the rise of major threats in the future while helping to reverse the decline in our national edge in science and technology by stressing research to develop advanced capabilities that will put potential adversaries at a serious disadvantage. We can cut back our forces to levels that are still comfortably superior to those of any possible near-term adversary, pay for a great revival in leading-edge research and development, and have money left over to reduce our nation's debt burden.. I go into greater depth in another paper.
Contact author.
28 January 2009.