At some point in the past month or so, John McCain and Barak Obama or their advisors have both said that they will pay for some or all of what they're proposing with reduced military spending.
The problem is that, even if all US troops are withdrawn from Iraq and Afghanistan, it's not at all clear that the Pentagon budget will fall much or even at all.
Consider the following:
- Much of a peace dividend comes from a reduction in the number of people in uniform when the hostilities end. But an end to all military efforts in Iraq and Afghanistan might not result in that reduction. In fact, the Pentagon is starting to talk about the need to increase the size of the active duty forces.
- The military has had to pay huge bonuses to get people to enlist and re-enlist. Presumably that won't be as necessary if hostilities end and if unemployment continues to rise. But compensation is going to have to increase in some way and personnel costs are already more than half of the Pentagon budget.
- Even before Iraq and Afghanistan, there was a general assumption that weapons would have to start to be updated starting around 2010. Add to that the impact of what was used in Iraq and Afghanistan and procurement costs are likely to be increasing.
- I'm told that the problems at Walter Reed can be found at many other active duty military hospitals. If true, that should become obvious as more troops return and are treated.
- And, although it's not counted in the Pentagon budget, veterans spending will be increasing as Iraq-Afghanistan veterans increasingly get treatment from the VA.
And, of course, this assumes that no other military problem arises in the next few years.
So where are the savings that everyone appears to be relying on?
Bookmark/Search this post with:
Peacetime military would save us big $ at the gas pump
The politicos are all talking about more drilling, but in reality the biggest oil purchaser in the word is (drumroll) . . . the US military.
It takes hundreds of thousands of barrels of oil a day to keep those Hummers and tanks and jets running in Iraq and to ferry supplies and equipment half way around the world to fight a foreign war.
If it stopped today we'd no longer have to fund oil consumption of the military to this degree . . . this is also what is killing our economy. It's the old "guns or butter" deal, only this time its "guns or gas".
This article is a bit dated (2006) but makes the point -- the military presently uses four times as much oil each day as it did during WWII:
http://www.energybulletin.net/node/13199
I don't know if the recent "surge" in Iraq had anything to do with the recent run up in prices but I suspect it did contribute to our pain at the pump. Millions of barrels being used to support the war in Iraq could have been diverted to other uses.
The politicians won't tell the public this . . . instead they will divert our attention with grand ideas to drill more offshore and squeeze oil out of shale.
Read the post. Personnel
Read the post.
Personnel costs are over half the defense budget.
First rule of major spending cuts:
Major spending reductions in a program can only come about by making major cuts in the major costs. Even major cuts in minor costs will only generate minor savings. In this case, over half the budget is personnel. Anyone who tries to sell cuts in minor areas of any budget as a way to generate major savings is not serious.
Oil is chump change.
Even IF the military used 400,000 barrels of oil per day (they use less than that) and assuming they pay $150/ barrel (they don't), that would be $60 million per day or less than $22 Billion per year. Assuming (BIG IF) they could cut oil use by 25% they might save $5.5 Billion, not chump change to you, but not much savings for a $600 Billion Defense budget and $3 Trillion budget.
Even complete elimination of nearly worthless programs like missile defense ($10 Billion per year) would make little dent in the budget. The only option for real savings in the defense budget is to cut personnel and their associated equipment cost. We would not need nearly as large a force if we were not trying to occupy and control a country of 20 million people.
About the best that can be done is to try to flatline defense spending the way Clinton did and let it drop as % GDP over time.
BTW- I still have a red Budget Battle mug.
I did read the post. You make a good point about military costs
being primarily labor, but how much would our price at the pump go down if the military could cut back 300,000 barrels a day? Those are 300,000 barrels that can't be provided to the global market right now (and it appears we are at peak oil, that is only a finite amount can be produced each day and, in the absence of major new finds, that number is now declining). When you consider that estimates for peak production of ANWAR (if it is developed) are around 700,000 to 800,000 barrels a day (by 2020 something, depending on what you read), the military use seems like a major player on the supply/demand curve these days.
I haven't seen any modeling on this, but I think it would prove interesting.
Remember Vietnam and the guns vs. butter, how that war fueled inflation at home? Ultimately, I think, the American economy (and people) has a threshold for the economic pain brought on by these wars . . .
US current use is 20.7
US current use is 20.7 Million barrels per day.
300 K (military use) is about 1.5% of all oil consumption.
Gas use dropped about 0.6% in the first 3 months of 2008 and prices are still going up.
Would a 1.5% reduction in use make a big difference?
The Jimmy Carter energy conservation and CAFE standards reduced US oil consumption by 20%. between 1978 and 1983. A similar reduction today would be about a 4 MBD reduction.
Again,
Major reductions in a program (or oil consumption) can only come about by making major cuts by the major consumers. Even a major cut to a minor consumer (in this case the military) only produces minor reductions.
There are plenty of good reasons to leave Iraq to the Iraqis ASAP. But oil use reduction is not one of them.
Re: oil and the Defense
Re: oil and the Defense budget, I have a different question: If we (and our allies and the world) were much less dependent on oil, how much could we cut from our Defense budget? How much is necessitated by our need to (try to) protect the oil supply (trying to maintain regional stability in the Middle East, guaranteeing open shipping lanes in the Persian Gulf / Straight of Hormuz, etc.)
And while we can't go back in time, if we hadn't been propping up the House of Saud all these decades, and fought the first Gulf war to keep Saddam from controlling/threatening too much of the world's oil, following that with permanent bases in Saudi Arabia, would we need to be fighting a "war on (radical islamist) terror" today?
So the first question I ask is how much dependence on oil for non-Defense consumption necessitates incremental Defense spending in general? Anyone know of any studies/analysis of this question?
So Brooks, are you saying
So Brooks, are you saying that Jimmy Carter was right and Ronald Reagan was wrong about energy policy?
http://www.flintexpats.com/2008/06/energy-deja-vu.html
bakho, First, I'm not much
bakho,
First, I'm not much for equating sound-bites with policy and then judging the relative merits of alternative policies on that basis.
Second, they both seemed to be advocating reducing our dependence on foreign oil, so I'm not sure how your question/implication/point relates to what I said.
As for the proportion of the oil we consume coming from domestic vs. foreign sources, that issue seems overrated to me. My understanding is that, because the price of oil is set in a global market, and because even additional U.S. production (e.g., ANWR and offshore) would be a drop in the bucket of the total world supply, the retail price of oil and gasoline in the U.S. would not be significantly affected by changes in that proportion. But a major disruption of the supply of oil that is now produced in the Middle East shipped throught the Persian Gulf sure as heck would increase the retail price of oil and gasoline in the U.S. even if we were producing more of the oil we consume. So we'd still have to fund the Defense budget sufficiently to protect that supply.
Careful with that Clinton approach......
bakho said: "About the best that can be done is to try to flatline defense spending the way Clinton did and let it drop as % GDP over time."
The problem with that approach is that Clinton did not flatline military deployments around the world......he escalated them significantly.....
sdgw
To the world you may be one person, but to one person you may be the world. 张家界旅游
张家界旅游景点
自驾游
张家界风光
户外
张家界旅游网友情连接
Post new comment