Opinion

Nicholas Wapshott

The fight over the best form of defense

Nicholas Wapshott
Mar 4, 2014 15:57 UTC

With Europe on the brink of a shooting war over Russia’s occupation of Ukraine, it may seem an odd time to propose a sharp reduction in the size of the U.S. Army. But that is what Defense Secretary Chuck Hagel will do Tuesday when President Barack Obama’s new budget request to Congress is published.

Hagel wants to reduce the Army to its smallest size since 1940 — before Japan’s surprise attack on Pearl Harbor propelled  the United States into World War Two. Hagel’s plan would see the Army shrunk to 450,000 regulars, slightly less than the 479,000 troops we had in 1999, before we rapidly expanded after the 2001 al Qaeda attacks and we embarked as well on the optional war to free Iraq from the despot Saddam Hussein.

Obama’s appointment of Hagel, a former moderate Republican senator from Nebraska, was canny. Democrats have often employed Republicans in Defense to disguise what is often regarded as a weakness on military matters by the Democratic Party, which has become the natural home to the nation’s pacifists.

Democratic presidents, however, have been the most bellicose throughout U.S. history — from Woodrow Wilson taking America into World War One, Franklin D. Roosevelt entering World War Two, Harry S. Truman leading the charge in the Korean War, John F. Kennedy embroiling us in the Vietnam War and Bill Clinton bombing Kosovo.

The isolationists of the last century — from both parties — opposed the expansion of our armed forces not merely to stay out of what President George Washington labeled “foreign entanglements,” but because they resented the high cost of war. The divide between those who insist the United States should take a lead in the world, through military means if necessary, and those who insist we must keep spending to a minimum has long been with us.

The end of budget scare politics

Nicholas Wapshott
Dec 23, 2013 15:57 UTC

“Are you kidding me!” The cry of anguished disbelief from House Speaker John Boehner has brought down the curtain on a five-year-long battle over public debt that will not be lifted until the presidential election of November 2016.

There may be scuffles and there will be a good deal of wailing and gnashing of teeth, but members of the Republican leadership have concluded their attempts to pay down the massive federal government borrowing will be put on hold until they have control of the presidency and both houses of Congress.

This has been a long journey. America already owed a great deal when the financial freeze of 2008 sent the economy over a cliff. To save the nation — and the world — from penury not seen since the Great Depression 80 years before, George W. Bush’s Treasury team ignored the advice of many of their fiscally conservative supporters and proposed that $800 billion more be borrowed and spent without delay.

The sequester is just as destructive as we thought

Nicholas Wapshott
Apr 23, 2013 19:40 UTC

Remember the sequester? When seven weeks ago the deadline to find a federal budget compromise came and went, there was much handwringing in Washington. In the event that no agreement was found there were to be cuts to public spending so severe and painful that no one would dare fail to agree. To deter Republicans from holding out, half the immediate spending savings of $85.4 billion was to be found from the defense budget, and, to ensure Democrats would work to find a deal, half from annually funded federal programs. Despite these encouragements to fiscal discipline, the March 1 deadline came and went.

For weeks the word “sequestration” was used so often that commentators and their readers grew sick of it. The headlines moved on. But quietly, without making much news, implementation is well under way and proving just as dire and destructive as advertised. It is hard to fully comprehend the impact of death by a thousand cuts and where they fall. This week the sequester broke surface when it began affecting air travel, causing long delays at airports, which is to be expected when you send 1,500 air traffic controllers home without pay. One in 10 controllers will stay at home on unpaid leave every day until October. With the vacation season looming, crowded airports full of frustrated passengers will become commonplace.

Many cuts have an impact less obvious than gumming up airports. Carnegie Mellon University in Pittsburgh, which relies upon federal sources for 86 percent of its research, is losing $7 million between now and September, while the University of Pittsburgh will lose $26 million, mostly from health research. All other research universities tell a similar story. This fiscal year the National Institutes of Health, the largest federal funding agency for many schools, like the University of Minnesota, is spending $1.5 billion less on research.

Here’s the path around the fiscal cliff

Nicholas Wapshott
Dec 3, 2012 18:40 UTC

The “fiscal cliff” talks offer a chance to rebalance the American economy so that the long years of living beyond our means — spending too much and raising too little, paid for by borrowing from the Chinese – will be brought to an end in an orderly fashion. As we have seen from the pitched battle between the White House and the Republican House leadership, finding the right balance between tax increases and spending cuts is not easy.

The guiding principle for both sides, however, should be primum nil nocere: First, do no harm. Having survived the worst financial crash in 80 years, the United States should do nothing to put the fragile recovery at risk. Since the turmoil of 2008, economic growth remains positive but feeble, which is more than you can say for comparable economies, such as the eurozone and Britain, that have battened down the hatches and nosedived into slump. The 17 eurozone countries are deep in recession with joblessness at more than 11 per cent; last quarter the U.K. briefly emerged from a double-dip recession of its own making but is expected to enter a triple-dip recession by the end of the year.

If we get the fiscal cliff bargain wrong–too-large tax increases combined with too-deep, too-early cuts in public spending–we risk tipping the economy back into the painful recession we have just escaped. In Washington, the trade-ff between tax and spending is portrayed as a quid pro quo, with Democrats demanding tax cuts for everyone except high earners and Republicans pressing for deep cuts in Medicare but not defense. The politicians have badly framed the argument. Think of tax and spending — if you will excuse the battered simile — as the knobs on an Etch-A-Sketch. To draw a perfect circle entails turning both knobs together at exactly the right rate.

from The Great Debate:

Should Obama mimic David Cameron’s austerity?

Nicholas Wapshott
Jul 27, 2011 20:17 UTC

By Nicholas Wapshott
The opinions expressed are his own.

In medieval times, a key member of a monarch’s retinue was the food taster, a hapless fellow who ate what his master was about to eat. If the taster survived, the food was deemed safe for the king’s consumption. President Obama has a taster of sorts in David Cameron, the British prime minister, who has embarked upon an economic experiment that echoes the recipe of wholesale public spending cuts and tax hikes needed if both sides in Congress are to agree to raising the federal government debt ceiling. How the British economy is faring offers Obama an idea of what a similarly radical policy of cutting and taxing here would mean to the American economy.

Cameron’s election in May 2010 coincided with the start of the Greek debt crisis. The Bank of England governor Mervyn King warned him that the public debt in the UK was so large that Britain, too, might see its lending become impossibly expensive, so Cameron decided that there was no time to lose in putting the fiscal books in order. He decided to slash public spending by 25 per cent over four years and immediately raise value added tax on goods and services from 17.5 to 20 per cent. Such a radical remedy found favor with the rump of British Conservatives who felt that Margaret Thatcher’s free-market, small government, “sound money” policies of the Eighties had not been pressed to their limit. In turn, Thatcher’s prescription to reduce the size of the state derived from her favorite thinker Friedrich Hayek, the author of “The Road to Serfdom,” who believed like many Tea Party supporters that government intervention inevitably leads to tyranny.

Cameron’s experiment in applying a radical cure to the British economy caught the attention of a number of conservatives here, among them George W. Bush’s speechwriter Michael Gerson, who wrote in the Washington Post, “If Cameron’s approach works -- dramatically cutting deficits without stalling economic growth -- it will be an obvious, powerful example for America.” “If only the Obama administration and the U.S. Congress had been so courageous. Instead, they are choosing to put off these big decisions,” moaned Matthew Bishop, New York bureau chief of the Economist, in a piece co-authored with Michael Green in the Wall Street Journal. Even Treasury Secretary Tim Geithner thought the British experiment worth trying. “I am very impressed, as one man’s view looking from a distance, at the basic strategy [Cameron] has adopted,” Geithner told the BBC.

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