Your Tax Dollars at Work: Subsidizing the Security of Wealthy Allies

from The Cato Institute – By Christopher A. Preble –

Tax Day, for millions of Americans, means ponying up to the IRS. The federal government does many things with your money these days—most of which would be more efficiently carried out at the local level, or in the private sector. But Uncle Sam also engages in a particular form of charity that many Americans overlook: spending many tens of billions of dollars to defend wealthy, developed nations.

A new Cato infographic puts it all in perspective. It shows how much American taxpayers spend to subsidize the security, and to defend the interests, of other nations that are more than capable of defending themselves.

The average American spends $2,300 on the military, based on the latest data available. That is roughly four and a half times more than what the average person in other NATO countries spends. These countries boast a collective GDP of approximately $19 trillion, 25 percent higher than the U.S. They obviously can afford to spend more. So why don’t they? Because Uncle Sucker picks up nearly the entire tab.

Looked at another way, U.S. alliances constitute a massive wealth transfer from U.S. taxpayers (and their Chinese creditors) to bloated European welfare states and technologically-advanced Asian nations.

Despite the size and wealth of our allies, they are military dwarfs compared to the United States. The particularly galling comparison is the disparity between what the United States spends on the military as a percentage of the federal budget and what other countries spend on their military relative to total government spending.

While the United States spends 20 percent of the budget on the military, Japan spends a paltry 2.3 percent. Our NATO allies? The average is 3.6 percent. Even South Korea’s share of military spending is roughly half of our total, and they have much bigger threats to worry about. By providing for their security, we have encouraged allies to divert resources elsewhere.

The Constitution stipulates that the federal government should provide for the “common defence.” But the document never talks about providing for the defense of other nations. Their citizens are not party to our unique social contract. On this tax day, you might rest assured that wealthy citizens around the world are grateful that you are defending them, but don’t hold your breath waiting for a word of thanks.

It is time to rethink our alliances and the culture of dependency we have created among our allies. They have become wards to Uncle Sam’s dole. Only by ceasing to foot the security bill for them will we create an incentive for them to spend more.

Infographic sources:

Central Intelligence Agency. “The World Factbook 2012.” Washington, D.C., 2012.

The International Institute for Strategic Studies. The Military Balance 2013. Edited by James Hackett. London: Routledge, 20.

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10 years ago

Why doesn’t my post show up?

Jeff Cpa
10 years ago

I have been making this point for years – I am happy to see the CATO Institute finally take on this issue and hopefully they will share their study with all of our elected Federal officials.

10 years ago

There is a simple way to resolve this issue and save the American taxpayers hundreds of billions a year in defense spending. All without endangering our own self defense needs. Our allies have collectively decided for years that they would rather spend the funds normally allocated for their own national defense on creating and growing massive social welfare and entitlement programs for their own citizens. They could do this because the United States could be relied on to act as their national defense force in any major military conflict. Well here’s how you fix the problem from our perspective:

If a nation wants the United States to act as their realistic primary defense force (think almost all of NATO, most of Asia, the Middle East, etc.), then they have to supply the bases at their cost, not ours, and they have to agree to pay us for all annual operational expenses associated with providing them with a strategic military defense. After all, we are already effectively acting as their sole viable defense force. This would be almost 180 degrees from how things work today. Foreign bases and the cost of personnel stationed abroad would cost the American taxpayer almost nothing under this arrangement! The cost would be covered by the host nation.

If a nation doesn’t want to go along with this, they are free to fund their own military. Oh wait, they spent all that money over the years to create social welfare states and generous entitlements for their citizens. So when push comes to shove, unless the leaders of these countries want to explain to their populations why their taxes have to shoot through the roof and their entitlements have to be cut or eliminated, I think you’ll find the approach I’ve outlined far more appealing to them. Will they howl? Definitely! They’ve been making money off our military bases for years. They’ve saved trillions on not having to fund their own militaries for decades. We’ve been picking up the tab for their decision to “just have the United States handle it”. Well guess what? We can’t afford to do it anymore. That’s the financial reality of the situation. It’s time the United States taxpayers stopped funding the real military costs for our allies. We can be their partners, not their patsies. All we need is leadership in Washington, which is in short supply these days, to put the plan in motion.

john gottlied
10 years ago

we need to bring all our troops home and stop trying to be the worlds policeman , the middle east were fighting when time started and will be when time endsnothing or nobody is going to change that fact.

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