Subsidized Europe Cries in Despair

Europe wonders: how will we maintain our lifestyles, if we can't rip off the American taxpayer anymore?

From the Financial Times, “The Costly End of the EU’s ‘Peace Dividend’”:

Europe enjoyed its years of low military spending thanks to a prolonged period of protection from the US, allowing it to build one of the most generous social security systems in the world… Across the EU, social protection has grown as a share of total government spending, rising from 36.6 per cent in 1995 to 41.4 per cent on the eve of the pandemic… While higher borrowing can cover some initial outlays… the cost of rearmament will ultimately be shouldered by taxpayers and beneficiaries of the continent’s social security nets.

There you have it. While in America it took an electoral upheaval and a near-military assault on the federal budget before citizens learned they were spending oversight-free billions on “climate change things” or funding trans hair salons in India, Europeans are still in the stage of needing The Financial Times to explain that in an unsubsidized country, taxpayers pay for taxpayer benefits.

Since EU President Ursula von der Leyen announced weeks ago that Europe is commencing a new “era of rearmament,” the atlanticist press has been churning copy in a frantic effort to explain what living without subsidized defense means. As an American who’s sent decades of taxes overseas, these dispatches are hard reading. It looks like a bunch of pundits Googled, “How do major industrialized countries pay for their own defense?” The tone is what an editor breaking the news about Santa Claus to forty-year-olds would shoot for. It’s incredible stuff:

First, it’s our fault. We allowed ourselves to be made the world’s biggest suckers. With our own “peace dividend” in reach at the end of the Cold War, we watched as first Bill Clinton and then George Bush ditched the idea in favor of new war spending, even as allies in Britain and Germany sharply cut their commitments. As this FT story makes clear, that American decision to plunge into debt to fund another NATO buildup coincided with heightened investment in health care in places like the U.K.:

America outspent the entire EU on defense, allowing the EU to spend more on “social protection”

The story later quoted a doomsaying economist. “Governments will either need to borrow more, which risks upsetting bond investors, or make offsetting budget cuts, which risks upsetting voters,” said Jack Allen-Reynolds of Capital Economics. Note Reynolds had to point out that cuts would risk “upsetting voters,” perhaps because this is not obvious to the FT audience.

I grew up in American liberal politics, where it was axiomatic that we had much to learn from Europeans. So wise, so sensible! Such terrific priorities! They offered free college, paid vacation, fabulous child care, mellow cops and a broad social safety net, while we heathens in America worked millions of hours and left even people like me to pay cash to set broken bones. I vividly remember seeing Michael Moore’s Where to Invade Next?, which cast Americans as dipshit Ricky Bobby types who swallowed their raw deal whole while artless Europeans seemed bewildered by the word “debt,” and expressed shock that Americans didn’t also demand the state-comped honeymoons or gourmet school lunches any civilized person would insist on:

Now it’s turning out that we essentially paid for those programs. Moreover, the bourgeois eggheads here who tsk-tsked their home country’s dumb priorities twenty or thirty years ago are the same people now demanding we not abandon or “diminish the value of military contributions” of European partners. We must remain faithful to “the most powerful and successful alliance in the history of mankind,” as the Atlantic described NATO. Apparently as citizens we were supposed to envy French lunches, Finnish prisons, and Italian vacations, but as voters we must never take steps toward allowing Americans themselves to afford them.

Fortunately, or unfortunately, Donald Trump and Europe are clashing over Ukraine, censorship and other matters, forcing our erstwhile allies to become re-acquainted with the concept of paying for stuff.

The full realization hasn’t hit yet. Europe’s suddenly war-mad pundits have been buzzing since Sky Marshal von der Leyen announced the buildup. It’s thrilling to have superpower aspirations again! The excited populace is only just re-learning forgotten basics. In a different jingoistic FT piece called “Making Europe’s defence spending great again,” Martin Sandbu explains there are “three main ways” to pay for a military:

There are only three ways to do this… You take away resources from consumption and private investment through taxes; government borrowing can coax the private sector into saving more resources, with the freed-up resources channelled to defence budgets; or the government can cut other budget expenditures.

It’s a museum moment, watching European readers hear the concept of choices explained for the first time. You can imagine them putting their listening ears on for the pitch. Fellow citizens! You can buy Leopard tanks with taxes, or you can borrow the money to buy them. Or, if you don’t want to do either, you can cut other programs, after which you will of course no longer have them…

Sandbu then quoted a pair of analysts from the Kiel Institute, who not only found that buildups tend to cost a lot in borrowing but that “the steeper the rearmament, the more debt in the mix.” Incisive!

Another innovation just being discovered is the idea that governments can raise borrowing limits. Graphic News, once described by The Guardian as the “Secret Weapon of Newsroom Infographics,” put out a digi-poster explaining Europe’s funding options, which might include “easing spending rules” to allow EU countries to “keep deficits below 3% of GDP.” In another War Funding for Dummies-style detail, the infographic explains that EU governments would approve the idea by voting on it:

Europe hasn’t figured out yet that balanced budgets and spending caps are a cool perk you can access easily when a) you’re not paying for your own defense, and b) your military institutions aren’t so powerful they can openly defy those laws. Having taken a step in our direction, they’ll have a similar $40 trillion monkey on their backs soon enough. At the moment they’re still at the tadpole stage of learning they can order more charge cards. Yet another FT piece, “The Options to Fund European Defence,” explained:

In Germany, where new public borrowing is strictly capped by a so-called “debt brake” enshrined in the constitution, the incoming leader Friedrich Merz is seeking to add as much as €200bn to an existing special fund…Brussels has also pledged to exempt defence spending from the bloc’s deficit and debt rules...

The piece ends on a sad note, quoting think-tank analyst Ben Zaranko. “You can’t sustainably borrow for higher defence spending needs,” he says, adding, “We will ultimately need to spend less on other things, or tax more.”

So it’s back to taxes or cuts, again! If only America would keep letting us crash on the couch, we could put off these choices…

Raised to think Europeans were our gentler, more civilized partners, they now look like shameless freeloaders who let their bills for daycare and paid vacations be subsidized by middle-American taxpayers, descendants of those poor Okies and hayseeds who died in piles to save Europe from itself generations ago. Kids of my generation were fed a succession of movies from Red Dawn to Russia House to Rocky IV to make sure we stayed focused on the Soviet enemy, but I’m beginning to think the higher purpose of NATO was to keep Europeans from killing one another, a condition they apparently had to be bribed to accept.

How many more realizations of this type are in the pipeline? What other entitled groups will have to be removed from the teat? It’s getting exhausting, isn’t it?