The Welfare State and Military Power

Europe-style entitlements mean Europe-sized defenses. 

For our money, one of the better parts of President Obama's speech at West Point this week was his connection between a healthy economy and U.S. national security. To quote: "Our prosperity provides a foundation for our power. It pays for our military. It underwrites our diplomacy." We only wish Mr. Obama understood the link between the larger welfare state he is trying to build at home and the economic weakness that will undermine our military power.
The proof is right before his eyes in the U.S. struggle to get Europe to contribute more forces to Afghanistan. Mr. Obama has called on NATO to buttress the U.S. surge of 30,000 in Afghanistan with 5,000 or more European troops. Secretary of State Hillary Clinton is in Brussels today to round up promissory notes. But except for the usual stalwarts—Britain and Poland—the allies are having trouble meeting even this modest goal. Germany and France are reluctant to contribute anything more to defeat the Taliban.
This is by now a familiar story, and a big part of the problem is the relative lack of military spending. Among the Western Europeans, only France and the U.K. spend more than 2% of GDP on defense, supposedly the NATO-mandated minimum. Nearly everyone else is below that. Germany, the continent's largest economy, stands at 1.3%. U.S. defense spending has been above 4% of GDP since 2004, having fallen to 3% after the Cold War ended.
No amount of pleading and shaming has worked on the continentals. NATO launched the "Defense Capabilities Initiative" in 1999, only to abandon it a few years later. Various attempts to stand up European "rapid reaction" forces have floundered.
Most European countries also commit more than half of what little they do spend on defense to soldier salaries and benefits. Equipment and training are shortchanged. Belgium devotes 74% to personnel; the U.S. 30.6%. Europeans lack cargo planes and helicopters to enable troops to get to, and move within, far-off conflict zones. In 2007, the U.S. deployed 14% of its troops in overseas operations, Europe 4%.

Such relative strategic weakness has made the Europeans more dependent on the American security umbrella, even as they resent it. But it also makes Europeans more disposed to avoid confrontation with adversaries like Saddam Hussein or Mahmoud Ahmadinejad. As Henry Kissinger has put it, European leaders are no longer able to ask their people to make major sacrifices.
The overlooked culprit here is the rise of the modern welfare state. Since World War II and especially from the 1960s, Europe has built elaborate domestic income-maintenance programs, with government-run health care, pensions and jobless benefits. These are hugely expensive, requiring high taxes and government spending that is a huge proportion of GDP. The nearby table compares the so-called tax wedge across nations, which is one measure of the relative burdens to finance cradle-to-grave entitlements.
One consequence has been slower growth in Europe, relative to the U.S. and China, with less tax revenue to spend on everything. Another result is that welfare spending has crowded out defense spending. The political imperative of health care and pensions always trumps defense spending, save perhaps in a hot war. Europe may never again be able to muster public support for a defense buildup of the kind the U.S. undertook to end the Cold War in the 1980s, or even the smaller surge after 9/11.
The tragic irony of this year is that Democrats are rushing the U.S. down this same primrose entitlement path. With ObamaCare certain to eat up several more percentage points of GDP as it inevitably expands, we will take a giant step toward European social priorities.

View Full Image

Associated Press 

 

For many Democrats, this is precisely the goal. Many Europeans, such as those at the Financial Times, will also welcome America's relative decline. But we doubt the American people fully understand what such a gilded entitlement cage means for our national vitality, or for our ability to defend U.S. interests at home and abroad.

The chart nearby shows the change in the share of U.S. federal spending on defense and domestic programs across recent decades. The upward blips in defense outlays occurred during Vietnam, the Reagan buildup and post-9/11. But the overall trend has been to spend less of the budget on defense. Add the stimulus, ObamaCare, a new entitlement for college and other Democratic plans, and the defense squeeze will only tighten. Higher taxes and borrowing may allow guns and butter to co-exist for a while. But over time, the welfare state will defeat the Pentagon here, as it has in Europe.
President Obama's domestic agenda may well mean that his successors lack the option to deploy 100,000 troops to Afghanistan, or to some other future trouble spot. This is the way superpowers lose their superiority.