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Account for Global Public Goods August 24, 2006

Posted by federalist in Finance, Government Spending, Taxation.

This is a problem worth drawing attention to: Old Europe’s bloviations are writing checks their defense budgets can’t cash.

In fact a majority of the world’s countries are not paying their fair share for the security they enjoy.  It seems easy to argue that, at least in a free country, GDP is a fair measure for assessing security taxes.  After all the more production the more a country depends on the world markets and the more utility it enjoys from increased world security.

According to the World Factbook we can see that most free countries are not spending as much as the United States on defense, as a fraction of GDP.  Americans are devoting 4% of our production to defense.  And as we have seen time and time again, our peerless military is the only force capable of successfully overthrowing genocidal and terrorist regimes, securing world commerce, and acting as a first-responder to both global catastrophes like the 2004 tsunami and regional conflagrations like the invasion of Kuwait.

When an American pays $4 in taxes to secure Middle-Eastern oil, stop genocide in Serbia, and hem in that North Korean maniac menacing the Pacific Rim, a German pays just $1.50, and our self-righteous neighbors to the North are spending just $1.10.  But everyone benefits from the global peace and security we are providing.

It’s time for the United States to start billing for its services.  Granted, we have no authority to tax other countries.  But we could start accounting for the defense debts of other nations.  For example, Spain spending just 1.2% of GDP on defense is short its fair share by $27BB for last year alone.  For 2005 Italy owes $32BB and Japan is down over $110BB.

The next time these countries start whining about the U.S. not paying its dues to the United Nations or not donating enough cash to earthquake victims let’s just add up their security debts to the United States — already trillions of dollars, and growing!

And if for some reason the United States agreed to an economically burdensome treaty like, for example, the Kyoto Protocol, we should first deduct our defense credits from our share.  It would be a long time before we had to cut any of our carbon emissions.



1. federalist - September 10, 2006

Also noteworthy:

By most measures, Americans remain the most charitable people world-wide. In 2005, giving in the U.S. averaged 1.75% of gross domestic product, according to the Charities Aid Foundation, compared to 0.75% in Britain, where leading philanthropists include Scottish entrepreneur Tom Hunter and singer Elton John. In Germany, France and Singapore, the rate of giving was about 0.25% of GDP last year.

Not that I can necessarily blame them: If my taxes were that much higher, I’d give that much less. But what are they getting in return for their high taxes?

2. federalist - March 4, 2009

Doug Bandow reiterates the argument: “Time to Drop America’s Military Welfare Dependents.”

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