Guns and Pensions

A nation’s choice between spending on military defense and spending on civilian goods has often been posed as “guns versus butter.” But understanding the choices of many nations’ political leaders might be helped by examining the contrast between their runaway spending on pensions while skimping on military defense.

Huge pensions for retired government workers can be found from small municipalities to national governments on both sides of the Atlantic. There is a reason. For elected officials, pensions are virtually the ideal thing to spend moneyon, politically speaking. Many kinds of spending of the taxpayers’ money win votes from the recipients. But raising taxes to pay for this spending loses votes from the taxpayers. Pensions offer a way out of this dilemma for politicians.

Creating pensions that offer generous retirement benefits wins votes in the present by promising spending in the future. Promises cost nothing in the short run — and elections are held in the short run, long before the pensions are due.

By contrast, private insurance companies that sell annuities are forced by law to set aside enough assets to cover the cost of the annuities they have promised to pay. But nobody can force the government to do that — and most governments do not.

This means that it is only a matter of time before pensions are due to be paid and there is not enough money set aside to pay for them. This applies to Social Security and other government pensions here, as well as to all sorts of pensions in other countries overseas.

Eventually, the truth will come out that there is just not enough money in the till to pay what retirees were promised. But eventually can be a long time.

A politician can win quite a few elections between now and eventually — and be living in comfortable retirement by the time it is somebody else’s problem to cope with the impossibility of paying retirees the pensions they were promised.

Inflating the currency and paying pensions in dollars that won’t buy as much is just one of the ways for the government to seem to be keeping its promises, while in fact welshing on the deal.

The politics of military spending are just the opposite of the politics of pensions.

In the short run, politicians can always cut military spending without any immediate harm being visible, however catastrophic the consequences may turn out to be down the road.

Despite the huge increase in government spending on domestic programs during Franklin D. Roosevelt’s administration in the 1930s, FDR cut back on military spending. On the eve of the Second World War, the United States had the 16th largest army in the world, right behind Portugal.

Even this small military force was so inadequately supplied with equipment that its training was skimped. American soldiers went on maneuvers using trucks with “tank” painted on their sides, since there were not enough real tanks to go around.

American warplanes were not updated to match the latest warplanes of Nazi Germany or imperial Japan. After World War II broke out, American soldiers stationed in the Philippines were fighting for their lives using rifles left over from the Spanish-American war, decades earlier. The hand grenades they threw at the Japanese invaders were so old that they often failed to explode. At the battle of Midway, of 82 Americans who flew into combat in obsolete torpedo planes, only 12 returned alive. In Europe, our best tanks were never as good as the Germans’ best tanks, which destroyed several times as many American tanks as the Germans lost in tank battles.

Fortunately, the quality of American warplanes eventually caught up with and surpassed the best that the Germans and Japanese had. But a lot of American pilots lost their lives needlessly in outdated planes before that happened.

These were among the many prices paid for skimping on military spending in the years leading up to World War II. But, politically, the path of least resistance is to cut military spending in the short run and let the long run take care of itself.

In a nuclear age, we may not have time to recover from our short-sighted policies, as we did in World War II.

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  • cxt

    Great article!…….if rather frightening as history tends to repeat for those whom fail to learn from it.

  • numnut

    Report from Iron Mountain.
    Needless expenditures in far off lands whose real objective is the treasure under the sand given to corporations.
    Beware of foreign entanglements Washington advised,beware of the military industrial complex Eisenhower advised.

    Time to use the military on the manner proscribed,to protect American soil,and no more.
    There is no other reason to deny butter and more importantly jobs in the US.
    The global free trade outsourcing of jobs to make corporations richer is part of the equation.
    Let’s not pretend it’s all about the people.

  • JimG33

    When Libertarians or Paleoconservatives rail on about the cost of our shrinking military and how it will break us, or that we should let the world roll on while we stay safe and sound behind our watery ramparts, I wonder if they have every studied the foreign policy of the Harding and Coolidge administrations. I know it was a long time ago but it was built on the idea of no foreign entanglements. Therefore the League of Nations was never ratified by the Senate. Now I'm as anti-UN as anyone on this site, but when Germany, Italy and Japan walked out of the League none of the European Powers did squat. So the renegades knew that there was no price to pay for the in gathering of the Aryan races into the greater Reich, the expansion of Japan in the conquest of China, and Italy's crushing of Libya and Ethiopia.

    As far as the US was concerned the Twenties were a time of experimentation in muscular pacifism. The Five Power Naval Treaty made sure that a naval arms race did not plunge the nation into war. It resulted in small aircraft carriers armed with obsolete aircraft. The London Naval Treaty meant that Britain would consider on a yearly basis if there was a need for the building of new warships. If their possible enemies seemed quiet, the building would not go forward. And I won't go into the Kellog-Briand Pact that outlawed war, something only and intellectual would love.

    At the end of the greatest war in history, Truman's Sec. Def. began to dismantle the wartime military; no new big deck carriers, no new long distance bombers, no new tanks. Sec. of State Acheson, drawing a line in the sand at the beginning of the Cold War seemed to leave the Korean Peninsula out of the area we would fight for. By 1950 the Norks attacked the ROKS, wit the blessing of Uncle Joe. I won't go any further into that history.

    The Cold War gave us the far flung military that we are dismantling today, and yet the same pacifist and isolationist fantasies so prominent in the twenties persist.

    I'll cleave to the words of Ronald Reagan when he rebuilt the military after the foolishness of Carter, "America has never gotten into a war by being too strong."