How Wars of Choice (and War Profiteering) are Corrupting American Civil Society: Parasitic Imperialism
By ISMAEL HOSSEIN-ZADEH
Although immoral, external military operations of past empires often proved profitable, and therefore justifiable on economic grounds. Military actions abroad usually brought economic benefits not only to the imperial ruling classes, but also (through “trickle-down” effects) to their citizens. Thus, for example, imperialism paid significant dividends to Britain, France, the Dutch, and other European powers of the seventeenth, eighteenth, nineteenth, and early twentieth centuries. As the imperial economic gains helped develop their economies, they also helped improve the living conditions of their working people and elevate the standards of living of their citizens.
This pattern of economic gains flowing from imperial military operations, however, seems to have somewhat changed in the context of the recent U.S. imperial wars of choice, especially in the post-Cold War period. Moralities aside, U.S. military expeditions and operations of late are not justifiable even on economic grounds. Indeed, escalating U.S. military expansions and aggressions have become ever more wasteful, cost-inefficient, and burdensome to the overwhelming majority of its citizens.
Therefore, recent imperial policies of the United States can be called parasitic imperialism because such policies of aggression are often prompted not so much by a desire to expand the empire’s wealth beyond the existing levels, as did the imperial powers of the past, but by a desire to appropriate the lion’s share of the existing wealth and treasure for the military establishment, especially for the war-profiteering Pentagon contractors. It can also be called dual imperialism because not only does it exploit the conquered and the occupied abroad but also the overwhelming majority of U.S. citizens and their resources at home.
Since imperial policies abroad are widely discussed by others, I will focus here on parasitic military imperialism at home, that is, on what might be called domestic or internal imperialism. Specifically, I will argue that parasitic imperialism (1) redistributes national income or resources in favor of the wealthy; (2) undermines the formation of public capital (both physical and human); (3) weakens national defenses against natural disasters; (4) accumulates national debt and threatens economic/financial stability; (5) spoils external or foreign markets for non-military U.S. transnational capital; (6) undermines civil liberties and democratic values; and (7) fosters a dependence on or addiction to military spending and, therefore, leads to an spiraling vicious circle of war and militarism. (The terms domestic imperialism, internal imperialism, parasitic imperialism, and military imperialism are used synonymously or interchangeably in this article.)
1. Parasitic Imperialism Redistributes National Income from the Bottom to the Top
Even without the costs of the wars in Iraq and Afghanistan, which are fast surpassing half a trillion dollars, U.S. military spending is now the largest item in the Federal budget. President Bush’s proposed increase of 10% for next year will raise the Pentagon budget to over half a trillion dollars for fiscal year 2008. A proposed supplemental appropriation to pay for the wars in Afghanistan and Iraq “brings proposed military spending for FY 2008 to $647.2 billion, the highest level of military spending since the end of World War II-higher than Vietnam, higher than Korea, higher than the peak of the Reagan buildup.”
The skyrocketing Pentagon budget has been a boon for its contractors. This is clearly reflected in the continuing rise of the value of the contractors’ shares in the stock market: “Shares of U.S. defense companies, which have nearly trebled since the beginning of the occupation of Iraq, show no signs of slowing down. . . . The feeling that makers of ships, planes and weapons are just getting into their stride has driven shares of leading Pentagon contractors Lockheed Martin Corp., Northrop Grumman Corp., and General Dynamics Corp. to all-time highs.”
But while the Pentagon contractors and other beneficiaries of war dividends are showered with public money, low- and middle-income Americans are squeezed out of economic or subsistence resources in order to make up for the resulting budgetary shortfalls. For example, as the official Pentagon budget for 2008 fiscal year is projected to rise by more than 10 percent, or nearly $50 billion, “a total of 141 government programs will be eliminated or sharply reduced” to pay for the increase. These would include cuts in housing assistance for low-income seniors by 25 percent, home heating/energy assistance to low-income people by 18 percent, funding for community development grants by 12.7 percent, and grants for education and employment training by 8 percent.
Combined with redistributive militarism and generous tax cuts for the wealthy, these cuts have further exacerbated the ominously growing income inequality that started under President Reagan. Ever since Reagan arrived in the White House in 1980, opponents of non-military public spending have been using an insidious strategy to cut social spending, to reverse the New Deal and other social safety net programs, and to redistribute national/public resources in favor of the wealthy. That cynical strategy consists of a combination of drastic increases in military spending coupled with equally drastic tax cuts for the wealthy. As this combination creates large budget deficits, it then forces cuts in non-military public spending (along with borrowing) to fill the gaps thus created.
For example, at the same time that President Bush is planning to raise military spending by $50 billion for the next fiscal year, he is also proposing to make his affluent-targeted tax cuts permanent at a cost of $1.6 trillion over 10 years, or an average yearly cut of $160 billion. Simultaneously, “funding for domestic discretionary programs would be cut a total of $114 billion” in order to pay for these handouts to the rich. The projected cuts include over 140 programs that provide support for the basic needs of low- and middle-income families such as elementary and secondary education, job training, environmental protection, veterans’ health care, medical research, Meals on Wheels, child care and HeadStart, low-income home energy assistance, and many more.
According to the Urban InstituteBrookings Institution Tax Policy Center, “if the President’s tax cuts are made permanent, households in the top 1 percent of the population (currently those with incomes over $400,000) will receive tax cuts averaging $67,000 a year by 2012. . . . The tax cuts for those with incomes of over $1 million a year would average $162,000 a year by 2012.”
Official macroeconomic figures show that, over the past five decades or so, government spending (at the federal, state and local levels) as a percentage of gross national product (GNP) has remained fairly steady-at about 20 percent. Given this nearly constant share of the public sector of national output/income, it is not surprising that increases in military spending have almost always been accompanied or followed by compensating decreases in non-military public spending, and vice versa.
For example, when by virtue of FDR’s New Deal reforms and LBJ’s metaphorical War on Poverty, the share of non-military government spending rose significantly the share of military spending declined accordingly. From the mid 1950s to the mid 1970s, the share of non-military government spending of GNP rose from 9.2 to 14.3 percent, an increase of 5.1 percent. During that time period, the share of military spending of GNP declined from 10.1 to 5.8 percent, a decline of 4.3 percent.
That trend was reversed when President Reagan took office in 1980. In the early 1980s, as President Reagan drastically increased military spending, he also just as drastically lowered tax rates on higher incomes. The resulting large budget deficits were then paid for by more than a decade of steady cuts on non-military spending.
Likewise, the administration of President George W. Bush has been pursuing a similarly sinister fiscal policy of cutting non-military public spending in order to pay for the skyrocketing military spending and the generous tax cuts for the affluent.
Interestingly (though not surprisingly), changes in income inequality have mirrored changes in government spending priorities, as reflected in the fiscal policies of different administrations. Thus, for example, when from the mid 1950 to the mid 1970s the share of non-military public spending rose relative to that of military spending, income inequality declined accordingly.
But as President Reagan reversed that fiscal policy by raising the share of military spending relative to non-military public spending and cutting taxes for the wealthy, income inequality also rose considerably. As Reagan’s twin policies of drastic increases in military spending and equally sweeping tax cuts for the rich were somewhat tempered in the 1990s, growth in income inequality slowed down accordingly. In the 2000s, however, the ominous trends that were left off by President Reagan have been picked up by President George W. Bush: increasing military spending, decreasing taxes for the rich, and (thereby) exacerbating income inequality.
The following are some specific statistics of how redistributive militarism and supply-side fiscal policies have exacerbated income inequality since the late 1970s and early 1980s-making after-tax income gaps wider than pre-tax ones. According to recently released data by the Congressional Budget Office (CBO), since 1979 income gains among high-income households have dwarfed those of middle- and low-income households. Specifically:
The average after-tax income of the top one percent of the population nearly tripled, rising from $314,000 to nearly $868,000-for a total increase of $554,000, or 176 percent. (Figures are adjusted by CBO for inflation.) By contrast, the average after-tax income of the middle fifth of the population rose a relatively modest 21 percent, or $8,500, reaching $48,400 in 2004.
The average after-tax income of the poorest fifth of the population rose just 6 percent, or $800, during this period, reaching $14,700 in 2004.
Legislation enacted since 2001 has provided taxpayers with about $1 trillion in tax cuts over the past six years. These large tax reductions have made the distribution of after-tax income more unequal by further concentrating income at the top of the income range. According to the Urban InstituteBrookings Institution Tax Policy Center, as a result of the tax cuts enacted since 2001, in 2006 households in the bottom fifth of the income spectrum received tax cuts averaging only $20; households in the middle fifth of the income range received tax cuts averaging $740; households in the top one percent received tax cuts averaging $44,200; and households with incomes exceeding $1 million received an average tax cut of $118,000.
2. Parasitic Imperialism Undermines Public Capital-both Physical and Human
Beyond the issue of class and inequality, allocation of a disproportionately large share of public resources to the beneficiaries of war and militarism is also steadily undermining the critical national objective of building and/or maintaining public capital. This includes both physical capital or infrastructure (such as roads, bridges, mass transit, dams, levees, and the like) and human capital such as health, education, nutrition, and so on. If not reversed or rectified, this ominous trend is bound to stint long term productivity growth and socio-economic development. A top heavy military establishment will be unviable in the long run as it tends to undermine the economic base it is supposed to nurture.
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