Money & The Economy

Rebuttal of CATO’s pseudo-“truth” about sequestration

As a leftist libertarian, anti-defense organization founded in 1977 by the anarcho-libertarian Murray Rothbard (who believed the US was solely to blame for the Cold War and “Russia was the aggrieved side” and who feted Stalinist butcher Nikita Khrushchev), CATO has consistently lied about America’s defense spending, policy, force structure, and needs, and has advocated deep, disastrous cuts in America’s defense budget, force structure, and programs.

And since the inception of the sequester, CATO has consistently lied by minimizing its impact and claiming that it’s not a real cut in defense spending at all, while vastly UNDERSTATING the military budgets and military prowess of America’s rivals, denying that the US faces any serious threats or has any peer competitors, and lying that the US will be secure even under sequestration – all blatant lies.

As a part of its sequester misinformation campaign, CATO has established a page on its website where it displays the following picture containing several blatant lies:

CATO’s blatant lies about sequestration

What is wrong with that picture?

To start with, EVERYTHING.

This is not “the truth.” This is a litany of blatant lies, coming, of course, from the anti-defense leftist Cato Institute.
Firstly, sequestration will set defense spending back by an entire decade – to FY2003, not FY2006, levels (to $469 bn, the lowest level since FY2003; with $88.5 bn in war costs, the total military budget will be $537.5 bn – far below FY2006’s level of $605 bn). Secondly, even FY2006 levels would be woefully inadequate today, because in FY2006, the world was nowhere near as dangerous, and America’s peer competitors not nearly as strong, as they are today; China’s and Russia’s military buildups were nowhere nearly as advanced as they are not.

Thirdly, the peak of Cold War military spending was in FY1987 (which began on Oct. 1st, 1986), when the US spent $613 bn on the military. Under sequestration, the post-sequester FY2013 total military budget (counting the entire DOD budget) will be less than $538 bn (minus sequestration of war accounts), plus less than $27 bn or so for outside-DOD defense programs, a total of less than $550 bn.

Fourthly, China’s real military budget is between $160 bn and $250 bn – not the mere official figure of $111 bn that the CATO Institute wrongly accepts as 100% true and propagates as “truth”.[1] China does not include the majority of its military programs and activities (e.g. arms purchases and its space program) in its official military budget, thus vastly understating it. Nor does it account for the PLA’s off-the-budget income sources. And then, one has to multiple the $180 bn – $250 bn figure by a factor of at least 3 to account for PPP differenes between the US and China. That means China’s real FY2012 military budget was between $480 bn and $750 bn.

Similarly, CATO’s figures for Russia are totally false, because they are both understated (Russia’s official military budget is only a small fraction of its real annual military spending – many ministries buy military goods with their own budgets and then give them as “free goods” to the Russian defense ministry) and not accounted for PPP differences. Moreover, since Russia has admitted that it plans to spend $770 bn over the next decade (i.e. $77 bn per year) on weapons modernization/procurement alone, the $63 bn figure that CATO falsely claims is not only utterly false, it’s downright laughable.

Fifth, contrary to CATO’s lies, the US now faces THREE existential threats – Putinist Russia armed with 6,800 deliverable nuclear warheads and flying nuclear-armed bombers into US airspace and around Guam, an equally aggressive Communist China with a large, modern military, and an ICBM-and-nuclear-armed North Korea. To deeply cut America’s defense spending in the face of these threats would be worse than utter folly; it would be suicidal.

And in case CATO hasn’t noticed, defense spending has already been cut several times since 2009.

All of CATO’s claims are blatant lies, as are the claims of this blog. Shame on CATO for lying to the public so blatantly.


[1] What’s more, while for the US CATO gives its (utterly false) post-sequestration FY2013 figure of $603 bn, for China it uses an obsolete official Chinese figure from 2010. Likewise, for Russia, it uses a figure from 2011 – i.e. one that is now two years out of date. Information on China’s real military budget and its huge military buildup is available here.

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