Guest Editorials
BY SHELDON RICHMAN | SEPTEMBER 21, 2011
9/11 and the National Security Scam
National security is a scam — an $8 trillion scam.
That’s the amount spent since September 11, 2001, on the military, including the Iraq and Afghan wars, and “homeland security,” according to Christopher Hellman of the National Priorities Project. If “veterans benefits, future costs for treating the war-wounded, and interest payments on war-related borrowing” are added, Hellman writes, the cost is much higher: $11 trillion, by the estimate of Brown University’s Watson Institute for International Studies. Hellman says by his reckoning, the full cost of “security” is $1.2 trillion a year.
And yet officials say Americans must not let down their guard. The mildest calls for cuts in the rate of growth in military spending are met with panic by “defense” officials.
Considering all that spending was triggered by a ragtag group of airplane hijackers armed with box cutters on 9/11, something just doesn’t add up. (Locks on flight-deck doors and armed pilots would have averted the attacks.) As Thomas Paine, the soul of the American Revolution, wrote in The Rights of Man about the British empire, “In reviewing the history of the English Government, its wars and its taxes, a bystander, not blinded by prejudice nor warped by interest, would declare that taxes were not raised to carry on wars, but that wars were raised to carry on taxes.”
In America’s case, however, it is debt, not explicit taxes, that was raised. On September 30, 2000, the national debt was $5.67 trillion. Today it is $14.7 trillion, a 160 percent increase. But debt could well represent future taxes or inflation, an implicit tax on cash balances — if the government thinks it can get away with it.
It is said 9/11 changed everything, but in fact it changed nothing whatsoever. Opportunistic politicians simply used the attacks to do much more of what they had already been doing and were hoping to continue in greater measure. Admittedly they were good at that. The attacks gave them a unique chance to frighten Americans into acceding to whatever the ruling elite wanted. As a result, those trillions were spent with little real oversight — the overseers were part of the conspiracy against the taxpayers. Reports say that $60 billion in contract money for Iraq and Afghanistan has been diverted to unknown recipients. The Pentagon routinely loses track of billions of dollars.
The military-industrial complex has never been larger or more pervasive. Thousands of companies exist to sell expensive things to the government. Fortunes have been made. The post–9/11 period has been a feeding frenzy at the taxpayers’ trough — grand larceny of historic proportions.
The attitude was well illustrated by Rep. James Clyburn, a South Carolina Progressive Democrat who worries that military spending might be cut because of concern about the budget deficit. Does he worry because he fears that security will diminish? No, he explained, he worries because he has military bases in his congressional district.
And people wonder why the economy is in a rut.
Of course, that is only part of the story. Monetary costs aside, the security fetish has cost Americans their privacy, turned the presidency into a virtual autocracy, and further blackened America’s reputation abroad with civilian-killing drone attacks and house raids in the night. The image of the United States has been firmly set as The Invader and The Torturer.
But isn’t all that, however regrettable, necessary because there are people out there who want to kill us? That’s what the national-security elite would like you to think. We’re told “they” attacked us because they hate our freedoms. If true, they must surely hate us a lot less now, thanks to the USA PATRIOT Act. Some say there is an intrinsic conflict between Islam and the West.
That’s all self-serving nonsense. The 9/11 attacks were intended as retribution for decades of U.S. policy that has inflicted death and misery on Arabs through support for oppressive Middle East regimes and direct military and CIA operations. The attackers committed mass murder, to be sure, but Americans won’t be safe if they don’t comprehend the danger. U.S. foreign intervention provoked the attackers, and the U.S. response played into their hands by creating more people who seek vengeance and by bleeding Americans financially.
Wherever Osama bin Laden is now, I suspect he’s laughing.
Stimulus II Won't Work, Either
President Obama won’t use the “stimulus” label to describe his nearly half-trillion-dollar jobs bill, but that refusal can’t hide the fact that he has no idea how economies recover from recessions. “Stimulus” is a tainted label because his $800 billion bill in 2009 was a failure. His economic team promised that passing that bill would keep unemployment from exceeding 8 percent. The bill passed, and unemployment climbed to more than 9 percent and has stayed there ever since.
With election day only 14 months off, one can readily see Obama’s desperation for a job program.
The administration insists things would have been worse without the stimulus bill, but no good theory supports that assertion. Here’s the key: “Stimulus” implies that something enters the economy from outside, like a defibrillator applying an electrical shock to the heart. But any money the government appears to inject into the economy was already in the economy and therefore was just moved around. If the government cuts taxes but keeps spending, no net addition of resources is made. Its borrowing and its new taxes have to come from somewhere.
As George Mason University economist Russ Roberts says, government’s stimulus of an economy is equivalent to taking water from the deep end of a pool and pouring it into the shallow end.
Did the first stimulus create or save 3.5 million jobs, as the administration claims? It depends on what you mean by “create,” “save,” and “jobs.”
It is certainly true that the federal government gave money to the states and localities, and some of that money was used to pay teachers, police officers, and firefighters. However, saying the money “saved” those jobs implies they really would have really vanished without federal money. In some cases, state and local politicians may have been engaging in fear-mongering. It’s happened before. But even if they weren’t, the claim assumes that if federal money hadn’t materialized, those politicians wouldn’t have found other things to cut in order to keep paying the teachers, police, and firefighters — the bloated administrative bureaucracies, for instance. We’ll never know because they were relieved of the necessity — the mother of invention — of making the “tough choices” they always say they are elected to make.
What about other jobs? Two recent studies by Garett Jones and Daniel Rothschild of the Mercatus Center demonstrate that most of the jobs were filled by hiring people away from jobs they already held. “[Hiring] people from unemployment was more the exception than the rule in our interviews,” the authors write. Some will claim that that is fine because the vacated jobs were available to the unemployed. But that implies highly skilled people were sitting around waiting for those jobs, and that is not the case. Moreover, the companies that lost employees had to incur high search and training costs to refill the jobs.
Supporters of Obama’s latest stimulus claim that repairing bridges and schools will put the unemployed to work. But it won’t happen because the unemployed aren’t typically qualified for such work. The thinking behind stimulus plans presumes that labor is easily interchangeable. It’s not. As one employer put it, “[The] type of construction home builders are trained for has nothing to do with bridges.” The federal government has increased infrastructure spending for 25 years, and Japan tried to jump-start its economy for 10 years with such projects. No economic miracles occurred.
There’s a deeper point. In economics a job is employment that creates value by helping to transform resources from a less-useful to a more-useful condition. In a free market, prices, consumer behavior, and profit-and-loss sheets signal whether that criterion is met. A job is not merely exertion for which someone is paid. In the case of government and government-financed jobs, where resources are acquired by force (taxation) and there is no market pricing at every stage, we can’t be sure that people who “work” actually create rather than destroy value. They may sweat, but they that doesn’t mean they have jobs.
So, then, how does an economy recover? Free people create economic growth when government backs off and lets them correct the mistakes induced by earlier monetary and regulatory stimuli. Nothing less will work lastingly.
Sheldon Richman is senior fellow at The Future of Freedom Foundation (www.fff.org) and editor of The Freeman magazine.
