WSJ Editorial: The Welfare State and Military Power
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...
... 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...
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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...
... 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...