Tag: Allies

U.S. Taxpayers Still Subsidizing Bloated Welfare States

Last month, the British government announced plans to spend two percent of GDP on defense through 2020, meeting the NATO mandated level. This comes after months of nudging from the Obama administration that feared “if Britain doesn’t spend 2 percent on defense, then no one in Europe will.” The reasoning is bizarre given that few nations were meeting this spending threshold to begin with. As I wrote in June:

In 2014, only Greece, Estonia, the U.S. and the U.K. spent as much as 2 percent of GDP on defense. Excepting NATO member Iceland, which is exempted from the spending mandates, the 23 other NATO members failed to spend even two cents of every dollar to defend themselves from foreign threats. And Greece only met the 2 percent threshold because their economy is falling faster than their military spending.

Perhaps things are shifting a bit among the NATO nations. Fear of Russia has prompted some members to announce increases to their defense spending. Germany, which currently spends only 1.2 percent of its GDP on defense, pledged to increase its defense budget by 6.4 percent over the next five years. Latvia and Lithuania will also increase their defense spending, reaching two percent of GDP by 2018 and 2020, respectively.

End America’s Defense Dole for South Korea

South Korean President Park Geun-hye postponed her trip to the U.S. because of a public health emergency at home. Unfortunately, the delay won’t make a future Park trip any more useful.

There is much on which the two nations should cooperate. But the military alliance is outdated. Despite having surged past the North, enjoying a 40-to-1 economic advantage and 2-to-1 population edge, Seoul continues to play the helpless dependent, unable even to command its own forces in a war.

South Korea eventually took off economically and adopted democracy. Yet through it all South Korea’s defense dependency on America persisted.

The South Korean government isn’t even willing to take over operational control, or OPCON, of its own forces in wartime. It isn’t ready, it insists. Yet North Korea commands its forces.

Of course, some South Koreans admit that they most fear shifting command would encourage Washington to withdraw its troops. Thus, their objective is to appear as helpless as possible as long as possible to retain the U.S. troop tripwire.

The present arrangement obviously is bad for America. Protecting South Korea isn’t cheap.

Europeans Rely on America to Protect Them from Vladimir Putin

Europe is at risk from Russia, we are told. But no one in Europe seems to care. Even the countries supposedly in Vladimir Putin’s gun sites aren’t much concerned.

Even if Russia threatens the continent, the Europeans don’t plan on defending themselves. Instead, virtually everyone expects America to save them, if necessary. Washington is being played for a sucker as usual.

Defense Secretary Ashton Carter recently announced that the United States. will contribute aircraft, weapons, and personnel to the “Very High Readiness Joint Task Force.” That’s not all. Separately, the Obama administration plans to pre-position tanks and other equipment for a combat brigade in Eastern Europe.

Carter explained that Washington was acting “because the United States is deeply committed to the defense of Europe, as we have for decades.” America is more committed to Europe than are Europeans.

U.S. Taxpayer Subsidies for European Welfare States Continue

The lackluster defense spending of U.S. allies is again in the news. At the G7 Summit in Germany earlier this month, President Obama implored British Prime Minister David Cameron to reverse the decline in the UK’s defense spending, which is widely expected to fall below NATO’s 2 percent of GDP mandate next year.

This is not the first time in recent months that the topic has come up. During a private meeting in Washington in February, Obama reportedly told the Prime Minister: “if Britain doesn’t spend 2 percent on defense, then no one in Europe will.”

In fact, hardly any of America’s NATO allies meet their NATO commitments. In 2014, only Greece, Estonia, the U.S. and the U.K. spent as much as 2 percent of GDP on defense. Excepting NATO member Iceland, which is exempted from the spending mandates, the 23 other NATO members failed to spend even two cents of every dollar to defend themselves from foreign threats. And Greece only met the 2 percent threshold because their economy is falling faster than their military spending.

Obama’s Reassurances to Europeans Should Dishearten Americans

President Obama is in Poland today, a visit that coincides with the 25th anniversary of that country’s liberation from communism. His four-day European tour will include a D-Day remembrance, meetings with G-7 leaders, and a possible encounter with Russian President Vladimir Putin in France, all while the crisis in Ukraine rages on.

Moments after stepping off Air Force One in Warsaw, with F-16s as a backdrop, the president sought to reassure our European allies, stating that America’s commitment to their security was “a cornerstone of our own security and it is sacrosanct.” He detailed the increased support America has provided, including a larger presence in the region, and later announced that he would ask Congress to fund a “European reassurance initiative” to the tune of $1 billion.

This is exactly the wrong approach. American taxpayers have been subsidizing the defense of European allies for too long. And they have reacted as one would expect—by spending less.

In fact, only three NATO countries – Estonia, Greece, and the United Kingdom – spent the NATO-mandated 2 percent of GDP on their defense in 2013, and even those three barely met the threshold. That is compared to the United States, which spent 3.7 percent of its GDP on defense, a figure that excludes national security spending in the Departments of Energy, Homeland Security, and Veterans Affairs.

As this chart prepared by my colleague Travis Evans shows, U.S. spending has risen and fallen over the past 13 years, but spending by NATO countries has consistently declined. And Americans still spend more than in 2002, both as a share of GDP, and in real, inflation-adjusted dollars.


In his speech last week at West Point, President Obama correctly called on U.S. allies to spend more on their own defense. He had done the same thing in March. Bob Gates made headlines in one of his last speeches as Secretary of Defense when he scolded NATO allies for their inadequate defense spending. Such exhortations have consistently failed, and I predicted last week that the president’s latest approach to getting the allies to share more of the burdens would also fail.

I elaborated on why yesterday at War on the Rocks:

Our allies are unlikely to pick up the slack unless the United States pulls back on its promises to defend others from harm, and reshapes its military accordingly.

This has been clear since at least the mid-1960s, when Mancur Olson and Richard Zeckhauser first articulated an economic theory of alliances. Because there is a general tendency for smaller nations to free ride on the security assurances of larger ones, Olson and Zeckhauser predicted that “American attempts to persuade her allies to bear larger shares of the common burden are apt to do nothing more than breed division and resentment.”

MIT’s Barry Posen states the bottom line succinctly in his new book, Restraint: A New Foundation for U.S. Grand Strategy. America’s allies, Posen writes:

Make their defense decisions in the face of extravagant United States promises to defend them. They will not do more unless the United States credibly commits to doing less.

Conversely, Obama’s pledges of more U.S. troops and more U.S. money will discourage the Europeans from doing more. Indeed, the president’s actions in Poland belie his burden-sharing rhetoric at home, and should be deeply disheartening to the people who elected him. Americans want genuine burden sharing, but they are likely to get only the phony kind favored in Washington.

Subsidizing the Security of Wealthy Allies

How much does the United States spend on the military relative to our allies? A lot. 

A new Cato video, produced by Cato multimedia gurus Caleb Brown and Austin Bragg, puts this comparison in perspective. The data jumps out of the Cato infographic from last week, and shows how we are subsidizing the security of our wealthy allies who can and should defend themselves. Instead, we provide for their security while they free-ride and spend their money on everything else (including bloated welfare states). Your tax dollars at work. 

Check out the video below.

The Costs of Our Overseas Military Presence

The AP’s Donna Cassata is reporting today on a study commissioned by the Senate Armed Services Committee, which purports to calculate the costs of the U.S. military presence overseas. This is a hot topic, but it isn’t exactly a new one. Americans have long been frustrated by inequitable burden sharing, with many of our wealthy allies spending a fraction of what we do on defense. On Monday, Cato published a new infographic on the subject to coincide with tax day (see below).

Unfortunately, the committee’s estimate that the permanent stationing of U.S. troops overseas costs us $10 billion each year is too low–in all likelihood, much too low. I have not yet had a chance to read the entire report, but the DoD’s own estimate of overseas military costs includes the costs of personnel, and is more than twice that amount, $20.9 billion (see p. 207 in the latest budget submission). Even the DoD’s figure, however, understates the true cost of our commitments to defend other countries that can and should defend themselves, because it doesn’t fully account for the additional force structure that is required to maintain a presence many thousands of miles away from the United States. If the U.S. military operated chiefly in the Western Hemisphere, with regular expeditionary operations far afield, we could safely have fewer people on active duty, and mobilize a large and well-trained reserve for genuine emergencies. This smaller military would require ships and planes to take them where they were needed, when they were needed, but not as many planes and ships as we have today. And no report can actually assess the costs and risks when and if our security commitments compel us to become embroiled in a distant war that does not engage vital U.S. interests. 

Other studies have attempted to assess all of the costs of these various global commitments, and the estimates vary widely. Graham Fuller and Ian Lesser of the RAND Corporation, for example, estimated in 1997 that the U.S. military presence in the Persian Gulf cost between $30 and $60 billion per year. A more recent study by Mark Delucchi and James Murphy estimated costs between $47 and $98 billion. Several of us at Cato have been compiling these estimates, and coming up with our own, as part of a comprehensive study of the costs of our global military presence. We will publish our key findings when they become available.

In the meantime, this much is clear: our security commitments, many of them holdovers from the Cold War, induce other countries to spend less than they could on their own defense. And they compel Americans to spend more than we should.  


Subsidizing the security of wealthy allies