Is America building a purely military economy?

A recent article in the New York Times, entitled "Why a Recovery May Still Feel Like a Recession," has buried in it some startling statistics about the direction of the US economy.

Floyd Norris' article points out that durable-goods shipments -- a basic measure of industrial production -- "fell by more than 20 percent during this recession, and would have declined further were it not for increased production of weapons."

The use of the military-industrial complex as a quick, if dubious, way of jump-starting the economy is nothing new, but what is amazing is the divergence between the military economy and the civilian economy, as shown by this New York Times chart.

In the past nine years, non-industrial production in the US has declined by some 19 percent. It took about four years for manufacturing to return to levels seen before the 2001 recession -- and all those gains were wiped out in the current recession.

By contrast, military manufacturing is now 123 percent greater than it was in 2000 -- it has more than doubled while the rest of the manufacturing sector has been shrinking.

But Norris adds a valuable caveat: "The United States remains primarily a civilian economy. The military now takes about 8 percent of all durable goods, up from 3 percent in 2000." While that puts the size of the military economy in perspective, it's important to note the trajectory -- the military economy is nearly three times as large, proportionally to the rest of the economy, as it was at the beginning of the Bush administration. And it is the only manufacturing sector showing any growth. Extrapolate that trend, and what do you get?

The change in leadership in Washington does not appear to be abating that trend. The military budget for 2009, not including the wars in Iraq and Afghanistan, is $651 billion, up 11 percent from the $583 billion spent on the military in 2008. (See the Pentagon's budget report here (PDF)). The Iraq and Afghanistan wars are estimated, separately, to cost $150 billion per year.

At his blog on Talking Points Memo, John Taplin argues the rapid militarization of the economy is a clear sign of a civilization in decline. Taplin cites the historian Alfred Toynbee's analysis of the decline of the Roman empire, as paraphrased at Wikipedia:

The Roman Empire produced few exportable goods. Material innovation, whether through entrepreneurialism or technological advancement, all but ended long before the final dissolution of the Empire. Meanwhile the costs of military defense and the pomp of Emperors continued. Financial needs continued to increase, but the means of meeting them steadily eroded. In the end due to economic failure, even the armor of soldiers deteriorated and the weaponry of soldiers became so obsolete to the extent that the enemies of the Empire had better armor and weapons as well as larger forces. The decrepit social order offered so little to its subjects that many saw the barbarian invasion as liberation from onerous obligations to the ruling class.

Sound familiar?

-- Daniel Tencer

http://rawstory.com/blog/2009/08/is-america-building-a-purely-military-economy/