Money & The Economy

Rebuttal of Veronique de Rugy’s latest anti-defense lies

The French libertarian Veronique de Rugy, who currently lives in the US and writes garbage for the GMU’s Mercatus Center, and who is totally ignorant about federal budgetary and defense issues, but nonetheless thinks she’s qualified to comment on them, has a strange habit of lecturing the American people and American policymakers about what US defense spending levels should be, how deeply and how fast to cut them, and by what method (her preferred method is sequestration).

But let’s leave aside the fact that she’s a Frenchwoman, not an American, and thus, America’s budgetary affairs are none of her business. (When was the last time an American think-tank employee lectured the French about what they should spend their money on?) Her claims about defense spending are utter garbage, and they’re so far off the mark that they’re laughably easy to refute.

At the same time, she continues to rehash her old lies and make up new ones, thus showing she’s not merely ignorant: she’s a compulsive liar who is deliberately lying about defense spending to mislead the public and the Congress.

An example of this is her latest screed for the libertarian “Reason” magazine, wherein she falsely accuses Republicans of accepting military Keynesianism (i.e. the belief that military spending creates lots of jobs) and makes utterly false claims about defense spending, speaking of:

“the impact that massive, ongoing Pentagon spending has on the economy…the permanent war economy—military spending now consumes roughly 20 percent of our budget, at a cost of over $700 billion including war spending…”

Quoting her, libertarian Senator Rand Paul, also a strident opponent of defense spending and a proponent of deep defense cuts, falsely claims that:

“It’s always sad when conservatives make liberal economic arguments: “It’s an article of faith among modern Democrats that employment and the overall economy depend on government spending. Although Republicans supposedly reject that premise, they make an exception in the case of military spending.””

Garbage. We don’t say that because we believe in Keynesianism. We say that because a strong military marches on its stomach, or rather, on its budget: it depends on how much funding is provided for its troops, their training, bases, equipment, operations, and maintenance. Deep defense cuts result in a severe weakening of the military. That is an unavoidale fact.

Veronique de Rugy’s false claims about “the permanent war economy” and about military spending amounting to over $700 bn and consuming 20% of the federal budget are also utter garbage.

The US does not have, and has never had, a “permanent war economy”. America’s total military budget (which, in FY2012, amounted to $645 bn, not even close to the “over $700 bn” that de Rugy falsely claims[1]) amounts to only 4.22% of America’s GDP.Just four percent. And that includes war costs as well as the DOE’s defense-related programs.

This is the LOWEST share of America’s economy devoted to the military since FY1948, if one exempts the late Clinton years and the early Bush years. Throughout THE ENTIRE COLD WAR, excepting only FY1948, the US spent MORE on the military than today.

At the Korean’s War peak, the US spent 14% on the military; at the Vietnam War’s peak, over 9%; at the Reagan buildup’s peak, over 6%. So by de Rugy’s flawed logic, during the entire Cold War except FY1948, the US had a “permanent war economy” on a scale even larger than today. Of course de Rugy’s claim is utter nonsense; spending 4.22%, or even 6%, of GDP on the military does not amount to a”permanent war economy”.

Defense spending as a percentage of GDP from FY1940 to FY2011.

Military spending now accounts for only 17% of the federal budget (which is $3.699 trillion per year), NOT 20% as de Rugy falsely claims. Again, this is the lowest share of the federal budget devoted to the military since FY1948, excepting only the late Clinton years and the early Bush years.

At the peak of the Reagan buildup, a full 26% of the federal budget was devoted to defense; and in January 1961, when President Eisenhower delivered his “military-industrial complex” speech, over 50% – the absolute majority – of the federal budget was devoted to defense. Given that defense is the federal government’s #1 Constitutional duty, it is actually ridiculous that only 17% of the federal budget is devoted to the military while social spending consumes only 61%.

Given this Constitutional obligation, the federal government should be devoting a lot more of its budget to defense than it does. But it doesn’t. Defense gets only peanuts: 17% of the federal budget. And this share is set to shrink further, with or without sequestration.



Once again, all of de Rugy’s claims have been utterly disproven, and have been shown to be nothing more than blatant lies. Shame on her for propagating them, and shame on Sen. Rand Paul for spreading them. By doing so, he has shown that voters cannot trust a single word he says. Voters should take this into account before deciding whom to vote for in 2016.

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