Putting a price tag on empire -- $1 trillion

In Friday's DR, Bill Bonner revisited the "5 E's" that he saw shaping our world in the years ahead.  About the fifth E, Empire, he wrote:

Yes, dear reader…if you have to borrow from
your competitors to pay for it, your empire won't last very long.  The
United States Empire began in the late 19th century, when America began
throwing its weight around in the Philippines and Latin America.  It
probably hit its peak in the Clinton years…after its last major rival,
the Soviet Union, threw in the towel…and the U.S. stock market rose 11
fold in 17 years. 

Then, along
came George W. Bush, just at the right time with just the right
program.  Empires don't last forever.  So every great empire needs to
find a way to ruin itself.  Bush was the man for the job — with huge
new spending projects…including a war in Iraq that pinned down the U.S.
military, while Congress and the public squandered its assets.

Yes, stocks will eventually bounce back.  They
always do.  But unless there is some remarkable renaissance – probably
marked by bankruptcy, revolution and civil war, like the period in Rome
preceding the rise of Augustus — the glory days of the empire are
over.  It has peaked out.

During last week's Republican presidential debate in Florida, Ron Paul put a price tag on that empire — $1 trillion a year.

This declaration was beyond the pale for Michael Dobbs, the snarky keeper of the Washington Post's "Fact Checker" blog — one of a proliferating number of mainstream media sites attempting to "keep the candidates honest."  (A far more intellectually honest one is Politifact, a joint project of Congressional Quarterly and Florida's excellent St. Petersburg Times.

Paul's $1 trillion-a-year price tag irked Dobbs so much, he made it the very first thing he tried to take down in his post on the Florida debate.  (So much for the idea that Paul is a marginal candidate who should only be ignored.)

According to the latest analysis from the Congressional Budget Office,
total appropriations for Iraq, Afghanistan, and the war on terrorism,
came to $171 billion last year, up from $120 billion in 2006. The
projected figure this year is $88 billion. The Bush administration has requested $481 billion
for the Department of Defense for fiscal year 2008. Much of this money
would be spent even if the U.S. was not fighting any wars overseas:
Paul has never said that he wants to abolish the military altogether.

Other overseas expenditures (or "empire costs" to use Paul's
terminology) are relatively modest by comparison. The entire foreign
aid budget is around $22 billion, the State Department costs around $6
billion a year, and the United Nations eats up around $2 billion…

Ron Paul's figures do not add up. He has not explained where he gets
his $1 trillion estimate from for the "costs of empire." I suspect he
chose it because it is a nice round number.

Interesting how Dobbs says Paul "has not explained" where the $1 trillion figure comes from.  If he were a real reporter, Dobbs would have written, "Paul's campaign staff has not responded to our requests for a breakdown of the $1 trillion figure," so I think we can safely assume he didn't do this very basic legwork before posting his smear.  I wrote sentences along that line many times in the course of my broadcast news career; it's standard operating procedure.  (Establishment journalists love to talk about how bloggers don't hew to journalistic standards, but when they do their own blogs, they throw those standards out the window.) 

I suspect, though I can't prove, that the $1 trillion figure came from an article posted the day before the debate by Chalmers Johnson, author of the Blowback trilogy of books exploring U.S. foreign policy.  The first volume in that series was on the recommended reading list that Paul put together for Rudy Giuliani after their dustup at a debate last year, so it's not unreasonable to assume Paul read the article.  I heartily recommend reading the whole thing, but here's the passage whereby Johnson arrives at $1 trillion a year.

In discussing the fiscal 2008 defense budget, as released to the press on Feb.
7, 2007, I have been guided by two experienced and reliable analysts: William
D. Hartung
of the New America Foundation's Arms and Security Initiative
and Fred Kaplan, defense
correspondent for Slate.com. They agree that the Department of Defense requested
$481.4 billion for salaries, operations (except in Iraq and Afghanistan), and
equipment. They also agree on a figure of $141.7 billion for the "supplemental"
budget to fight the "global war on terrorism" – that is, the two ongoing wars
that the general public may think are actually covered by the basic Pentagon
budget. The Department of Defense also asked for an extra $93.4 billion to pay
for hitherto unmentioned war costs in the remainder of 2007 and, most creatively,
an additional "allowance" (a new term in defense budget documents) of $50 billion
to be charged to fiscal year 2009. This comes to a total spending request by
the Department of Defense of $766.5 billion.

But there is much more. In an attempt to disguise the true size of the American
military empire, the government has long hidden major military-related expenditures
in departments other than Defense. For example, $23.4 billion for the Department
of Energy goes
developing and maintaining nuclear warheads; and $25.3 billion in
the Department of State budget is spent on foreign military assistance (primarily
for Israel, Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, the United Arab Republic,
Egypt, and Pakistan). Another $1.03 billion outside the official Department
of Defense budget is now needed
for recruitment and reenlistment incentives for the overstretched U.S. military
itself, up from a mere $174 million in 2003, the year the war in Iraq began.
The Department of Veterans Affairs currently gets at least $75.7 billion, 50
percent of which goes for the long-term care of the grievously injured among
the at least 28,870 soldiers so
far wounded in Iraq and another 1,708 in Afghanistan. The amount is universally
derided as inadequate.
Another $46.4 billion goes to the Department of Homeland Security.

Missing as well from this compilation is $1.9 billion to the Department of
Justice for the paramilitary activities of the FBI; $38.5 billion to the Department
of the Treasury for the Military Retirement Fund; $7.6 billion for the military-related
activities of the National Aeronautics and Space Administration; and well over
$200 billion in interest for past debt-financed defense outlays. This brings
U.S. spending for its military establishment during the current fiscal year
(2008), conservatively calculated, to at least $1.1 trillion.

Now… as I pointed out in the comments on Dobbs' post (where I gave him more civil treatment than I have here), some portion of that $1.1 trillion surely falls under Paul's definition of legitimate national defense.  I don't know how much.  But whatever the percentage, Paul did not just pull the $1 trillion figure out of his a** as Dobbs asserts with zero evidence.

The Daily Reckoning