The Economy

[kandrathe]

The US already spends more money on its military than any dozen countries of the world put together. And, of highest dozen others, almost all are locked in a military alliance with the US. The US military budget is very close to the entire rest of the world: everyone vs. the US, in pure dollars, would only be a slight loss for the US! Count NATO allies, and it wouldn't even be close: this is the largest peacetime mass of military power, ever. There is no cutback under any president that changes the basic fact: the US has the most expensive army in the world, by miles and miles. Cutting it back to merely a few hundreds of billions of dollars would hardly leave the country militarily crippled. There's a huge yawning gap between having to "do without" a military and "spending slightly less colossal sums" on it.

Perhaps we spend too much, and everyone else spends too little. If we were to just look at Aircraft Carriers... USA 24 (12 are the huge Nimitz class 4.5 acre ships), rest of the world has 13 small ones. 2nd place is Britain with 3 Invincible class (two in commision), and the HMS Ocean.

As for Ronnie's role in bringing down the Evil Empire, his belligerent policy was certainly a contribution, but the major cards were already played by the time he came to office. War in Afghanistan, stagnating economy, increasing nationalist unrest, and inability to innovate were already present by 1980. Soviet defense spending had, in real terms, been increasing more or less steadily since Nixon was president, and did not particularily accelerate under Reagan. They actually somewhat flatlined, and while the Soviets were all a-twitter about SDI, they never really did anything about it in terms of spending. But, for whatever reason, nobody talks about Ford or Carter for their genius in causing Soviet overspending.

I think the "peace through strength" rhetoric backed up by a palpably strong military, and the increasing sophistication and bulk of the US nuclear missile program helped to convince the Soviets that they might not win the nuclear gambit.

In the end, it was Gorbachev's reforms that did them in. Fear of American technology and military spending was a part of their long-term motivation, and constant harassment in foreign policy was costly, but ultimately, the American part in the collapse of the USSR is secondary: the Soviets killed their own empire, through bungling their dictatorship, then through bungling their attempt to democratize.

Um, well sort of. I view it more that they decided to stop failing at what they knew (state run economy), and thought they could just jump in and be successful at something they knew nothing about (capitalism). Of course, it would have been pretty humiliating to ask the West for help, so they bungled forward with what they thought were the appropriate reforms. For example, one reason that capitalism can be successful in Europe and the US is that we have a long history of common law to resolve property disputes.

If you can find a way to pay down the debt while running budget deficits, I think I might be able to find you a job at one of those fancy hedge funds that just imploded, because that would be some impressive skill.

Which is what I meant originally, when I blamed the politicians of following Keynesian theory only when it suited them. Keynes did not advocate balanced budgets in the good times, but surplus budgets. When is the last time the US ran a surplus budget, or reduced our national debt? Answer: FY 1998 to 2001 -- So what happened in 2001 to change the good times? Tech bubble, Iraq War, Afghan War and Sept 11. The problem with Keynesian theory it seems is that there is always something to which we consider a national emergency sufficient to continue to use the charge card, rather than pay it down.