Profitable Peril: Trump on NATO defense spending and DC gridlock

At a recent campaign rally, our former president commented that if NATO countries did not maintain an agreed-upon level of defense spending, the United States would not only refuse to help defend those countries but would also encourage Russia to “do whatever the hell they want.”

Bombastic posturing of that sort stimulates both the extreme right and extreme left. The extreme right, who somehow turned dovish on me while I wasn’t paying attention, lauds that kind of rhetoric as unvarnished candor. The popular phrase is that he “tells it like it is.” At the same time, formerly dovish far left enjoys being outraged, never considering Trump’s storied history of using over-the-top hyperbole to make a point.

The rest of us are left to look around for any adults in the room, and we are thankful that the Fed chairman doesn’t talk that way. However, awkwardly, we must cede the point regardless of Mr. Trump’s lack of decorum. As of 2023, only 10 of the 31 NATO countries have met the 2% of GDP goal agreed upon in 2014. The majority of those in compliance border Russia, with Poland taking the lead. Poland is the one country whose percentage of GDP spent on defense exceeds ours, but Poland’s GDP is $429 billion compared with our $25 trillion.

Coincidently, we currently have stalled legislation in Congress that would provide military funding for Israel, Taiwan, and our de-facto NATO member, Ukraine. Initial efforts had tied military financing for a long-overdue but politically distorted immigration bill. The immigration measures proposed weren’t fully cooked, so that measure fell immediately.

A second bill funding our military efforts has now made it through the Senate, but without immigration provisions, the more conservative faction in the House simply won’t consider it. While it would seem logical to many of us to keep those issues separated, I force myself to remember that the primary source of power for any minority is obstruction–and the Freedom Caucus guys are pretty good at it. They're not only effective at obstructing Democrats, but they find time to obstruct their own party, too.

They understand the urgency of wartime funding and its power to motivate the movement of any immigration reform, but is it wise to play those games with the eyes of the world on us? What message does that send to allies and adversaries? I’m generally a fan of our system of government, but that particular element is sometimes hard to watch.

What captures my interest about the proposed legislation is that supporters are touting it as a domestic economic development bill–which it is. Most of the funds allocated by the bill would go to domestic arms manufacturers, who will, in many cases, replace armaments from our stockpiles already deployed elsewhere. It’s an economic stimulus package cloaked as national security at the very least, and the more noble intentions of preserving democracy are invoked when the cameras are on.

When I think about it, our former President’s outrageous comments could also be framed as economic development. As the world’s leading arms dealer, we control nearly 50% of the global market. When we take Russia, China, and other bad actors out of the equation, our share of the West-friendly arms industry approaches 90%. Why wouldn’t the U.S. cajole our partners into purchasing more arms?

The finer details of the proposed Senate bill also inform us about the nature of contemporary warfare, particularly in the Ukraine theater. One of the more oversized line items in the Senate bill is a massive number of 155mm howitzer rounds. In more familiar terms, that’s a shell that weighs about 100 pounds, is two feet long, and is slightly over six inches in diameter.

Each round has a kill radius about half the size of a football field, and Ukraine alone is going through those rounds at the stunning rate of 240,000 per month. The amount of destruction is unimaginable, but at $2,000 to $5,000 per round, so are the profits. Most U.S. 155mm rounds are produced in Tennessee, Missouri, Oklahoma, and, wait for it…the current President's hometown of Scranton, Pennsylvania.

I’m a reliable fan of economic development (especially when rural) and have always rooted for a strong national defense. Despite those leanings, I’m uneasy about how much money we spend in a failed attempt to maintain world order. I’m not ready to latch onto any conspiracy theories just yet, but Eisenhaur’s warnings about the Military Industrial Complex come to mind. In the end, it’s hard to ignore the fact that world conflict is very good for business.