Burning the Midnight Oil ...: Aint Gonna Study War No More

Burning the Midnight Oil for the Arc of the Sun

I guess its natural, as an advocate for transport cycling and for transport systems like High Speed Rail, light rail, and Quality Buses that support cycle transport, that among the enemies of our long term national interest, that I tend to focus on the Oil Patch and their allies.

But, what would our economy be like if we didn't study war no more?

Consider just official Federal Defense Spending, in 2005 dollars and as a Percent of GDP (to closest 0.1%) (BEA):

1995: $476.8b, 5.2%
2000: $453.5b, 4.0%
2005: $589.0b, 4.7%
2008: $659.4b, 5.0%

You can see right there why it was necessary to have Bush rather than Gore elected as President in 2000, and why the two candidates on the Democratic side in favor of expanding the size of the army were the two finalists in the Democratic primary contest to clean up for the mess that Bush made of things.

Direct Federal spending on "Defense" goods and services was heading south of 4%, and that could not be tolerated.

Suppose we transitioned to a cap on "Defense" spending of 3%. That would be plenty for naval forces to defend sea lanes, though maybe not for maintaining the current level of amphibious assault forces ... it would be plenty for air forces for continental defense, though of course we might have to scale back on overseas air bases ... it would be plenty for armed forces for continental defense, though of course we might have to scale back on overseas air bases.

It would, indeed, be plenty to retain the biggest military force on the face of the planet. Just not necessarily enough to allow us to invade one country while planning to invade another one.

And at the present size of GDP, it would be about $400b in direct government Defense spending, which would free up about $260b annually to invest in actual national defense.

What would we be giving up

There is one thing that we would certainly have to give up under this plan: the Carter Doctrine:

The region which is now threatened by Soviet troops in Afghanistan is of great strategic importance: It contains more than two-thirds of the world's exportable oil. ...

This situation demands careful thought, steady nerves, and resolute action, not only for this year but for many years to come. ...

Meeting this challenge will take national will, diplomatic and political wisdom, economic sacrifice, and, of course, military capability. We must call on the best that is in us to preserve the security of this crucial region.

Let our position be absolutely clear: An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force.

The Persian Gulf is in Dar Islam, on the faultline in the biggest structural conflict within Dar Islam, between Shia and Sunni, southeast of a rising China, northeast of a rising India, southwest of a European continent slowly developing the accouterments of a nation state, and south of a Russia ruled by an oligarchy well versed in using foreign policy adventurism to distract from domestic authoritarianism.

And what is the Carter Doctrine? That we must maintain sufficient military force to assure access to the Oil of the Person Gulf for the global oil market, because if the supply is cut off, the price will go through the roof.

And then look at the Price Tag of that policy ... given that there is no other geopolitical challenge that we face that we could not meet with the military force that can be maintained on a budget of 3% of GDP ...

... $260b/year is a conservative estimate. Its just the economic cost of government purchases of "Defense related" Goods and Services. It entirely omits the economic commitment to a perpetual trade deficit in the Energy sector. It entirely omits the economic commitment to the "strong" (which is to say, anti-export) dollar exchange rates required to maintain the global base network of over 700 foreign bases. It entirely omits the economic cost of directing so much of our government spending into the destruction of global production capacity.

Greatest of all, it entirely omits the social cost of the militarization of US society.

So, $260b is a conservative price tag.

And what is the Real Cost of the Carter Doctrine

These are real resources of the nation being directed into the Military-Industrial sector of the economy. The question, then, it what kind of National Defense could we buy for $260b/year in terms of Energy Self-Sufficiency?

I have sketched some of these before in various forums:

we can spend $75b per year over the next six years to electrify the Dept. of Defense "STrategic RAil Corridor NETwork - STRACNET. That requires capital funding, but only when oil is cheap ... in the context of expensive oil, bonds to electrify STRACNET are readily self-funding through user charges. A form of crude oil import tariff that slides off as crude oil approaches $80/barrel would suffice to "fund" that. Or else, we can simply deficit spend for that ... since cutting off 10% of our demand for petroleum imports is an investment that pays for itself in multiple ways.

We can spend $75b per year over the next decade to build local electric transport corridors ... from trolley buses and Rapid Streetcars through conventional Light Rail and commuter heavy rail all the way to the mass transit niche for the biggest cities. Fund those projects on an 80:20 federal match, include both direct and indirect impacts on Energy Independence and Congestion Relief, and there will be no difficulty finding projects that justify the public investment. And, again, we can simply deficit spend for that ... if we can spent $1T+ on trying and failing to gain access to the last big pools of cheap crude oil in the world, we can definitely spend $750b on permanent alternatives to crude oil based transport.

We can spend $5b a year over six years on Electricity Superhighways to connect our main regional consumption grids to renewable resource areas. We can spend $20b a year on electric inter-urban transport over the next decade, from Express HSR through Regional and Emerging HSR to electric stopping trains. We can spend $25b a year on interest subsidies for Connie Mae finance for decentralized CO2 emission reduction and energy efficiency improvements, repaid out of the reduction in operating costs, on an ongoing basis.

And that's just $200b over the next six years, $120b over the decade. There's $60b left to add, rising to $140b by the middle of the next decade. If I was looking for a single program in addition to those sketched above, I would consider a wholesale conversion of our agricultural production subsidies and price supports into ecosystem conservancy payments for agricultural practices that preserve and rehabilitate the life support capacity of our continent.

Cost / Benefit Analysis

Lessee: for $260b a year, spent over a long enough time span, we can reach oil independence and Energy Self-Sufficiency. Meanwhile, even at the present levels of the military budget, we cannot guarantee that we have the military capacity to keep the Straits of Hormuz open. A couple of supersonic cruise missile strikes on a carrier task group and a couple of supersonic cruise missile strikes on some oil tankers, and the Straits shut down.

This really is the stage before the running of the numbers, where you work out which options allow you to reach the objective and which do not. The above may not be the preferred option, but its on the list for evaluation. Meanwhile, the Carter Doctrine does not reach the objective of Energy Security, so it does not get on the list for evaluation.

Conclusions

Waddya think, I can reach any conclusions here without your help? That's crazy talk.