Nuclear weapons have played a major role in U.S. force planning for many decades. But we have never had a thorough accounting of the total cost of these weapons, and we still don’t. (The best to date is probably this study by Stephen I. Schwartz and Deepti Choubey, but they don’t claim to capture every nickel spent on nuclear weapons.)

The Washington Post‘s Glenn Kessler published a fact checker article earlier this week that challenged the claim that we would spend $700 billion on nuclear weapons over the next decade. Since then, other organizations have come forth to decry the lack of transparency within the nuclear weapons budget, and call for the government to do a much better job of documenting all of the costs associated with our many nuclear weapons programs. This would include an understanding of the full life-cycle costs for fissile material, warheads, and delivery vehicles, from design and development, to production, to retirement and waste removal and abatement. As with the rest of the Pentagon’s budget, which has never been subject to a complete audit of its assets and liabilities, the nuclear weapons portion (much of which resides in the Department of Energy) remains shrouded in secrecy.

I hope that the latest dust-up over what we are actually spending creates additional pressure on the bureaucracy to open up its books.

This an excerpted version of a longer post from “The Skeptics” at the National Interest.

Debate Needed on Nuclear Weapons Spending is a post from Cato @ Liberty - Cato Institute Blog

Last week, a motion to proceed on a budget resolution introduced by Sen. Rand Paul (R-KY) was decisively defeated in the Senate (7 in favor, 90 opposed). Paul’s proposal would have balanced the budget in five years (fiscal year 2016) through spending cuts and no tax increases. Social Security and Medicare would not have been altered. Instead, the proposal merely instructed relevant congressional committees to enact reforms that would achieve “solvency” over a 75-year window.

That’s hardly radical.

Paul’s proposed spending cuts were certainly bold by Washington’s standards, but they weren’t radical either. For example, military spending would have been cut, in part, by reducing the government’s bootprint abroad. From the Paul proposal:

The ability to utilize our immense air and sea power, to be anywhere in the world in a relatively short amount of time, no longer justifies our expanded presence in the world. This budget would require the Department of Defense to begin realigning the over 750 confirmed military installations around the world. It would also require the countries that we assist to begin providing more funding to their own defense. European, Asian, and Middle Eastern countries have little incentive to increase their own military budgets, or take control of regional security, when the U.S. has consistently subsidized their protection.

Over 750 confirmed military installations around the world. That’s enough to make a Roman emperor blush. Isn’t continuing to go deeper into debt to subsidize the defense of rich allies the more “radical” position? (See these Cato essays for more on downsizing the Department of Defense.)

Other cuts included eliminating the Department of Housing & Urban Development, the Department of Energy, and most of the Department of Education. But unlike most Republicans, Paul didn’t apologize for the cuts or use the debt dilemma as a cop out. Instead, he explains in his plan why these federal activities are counterproductive and should be devolved to the states or left to the private sector.

It’s disappointing that Paul could only get seven Republicans and no Democrats to support his budget. For all the bluster about needing to cut spending, not raise taxes, and stop the Obama administration’s big government agenda, most Republican senators said “no dice” when given the chance to vote in favor of a plan that would accomplish all three objectives and balance the budget in five years.

Senate Vote on Rand Paul’s Budget is a post from Cato @ Liberty - Cato Institute Blog

A little over a year ago, I posted two different graphs (with the help of my colleague Charles Zakaib) that showed the growth of U.S. national security spending vs. that of other NATO allies over the last ten years. The data, based on the International Institute for Strategic Studies’ annual Military Balance, showed that U.S. taxpayers spend far more on our military, both as a share of total economic output, and on a per capita basis, than do any of our allies.

New data, for 2009, was made available in IISS’s Military Balance 2011, and the revised graphs are shown below. (Again, thanks to Charles for his help). As I suspected, the gap remains as wide as ever. In a few cases, it has grown wider.

As you can see, the $2,101 that every American man, woman, and child spends is nearly two and a half times as much as the average Frenchman, over three and a half times that of the average German, and more than fourteen times what the average Turk spends.

But all of these numbers are slightly misleading. The gap between what Americans spend on national security, broadly defined, and what everyone else pays, is actually wider.

For example, IISS’s graphs include only U.S. DoD budgetary authority, meaning the Pentagon’s base budget plus the costs of the wars. A more accurate “national defense” total includes nuclear weapons spending in the Department of Energy ($22.9 bn in 2009) and a catch-all category of “other” defense-related spending tucked away elsewhere in the federal budget totaling $7.25 bn. That adds another $95 a year to every American’s tax bill.

But wait, there’s more. A more accurate apples to apples comparison of all U.S. national security spending to that of other countries would at least include the Department of Veterans Affairs ($96.9 bn). Other countries (France, Germany, Italy, Spain, Greece, Belgium, and Portugal) include military pensions in their base budgets. Meanwhile, people in other countries would think it foolishly redundant to fund both a Department of Defense and a Department of Homeland Security, but Americans don’t (or at least Americans in Washington don’t). DHS funding in 2009 totaled $45.3 bn. All told, I estimate that the average American spent at least $2,644 on national security in 2009. The total was certainly higher in 2010 since the costs of the wars in Iraq and Afghanistan peaked in that year.

And in case you’re wondering, we spend at least 17 times as much as the average Chinese. Meanwhile, total U.S. security spending exceeds that of China, Russia, North Korea, Syria and Iran — combined – by a factor of 3.3.

As the debate over federal spending drags through the dog days of summer and into the autumn, you will hear many people talk of our government’s solemn obligation to defend the citizens of this country from foreign threats. President Obama reaffirmed on Wednesday, in case anyone doubted it: “As Commander-in-Chief, I have no greater responsibility than protecting our national security, and I will never accept cuts that compromise our ability to defend our homeland or America’s interests around the world.” (my emphasis)

Surely some of the missions that our military is asked to accomplish actually do have that effect, but the definition of “America’s interests” has expanded so dramatically over the past few decades that it is practically devoid of any meaning.

Thus, you — yes, you, American taxpayer — will be told that our national interests around the world compel us to treat the Straits of Gibraltar and Malacca as though they were of equal importance to U.S. security as that of the Straits of Florida, the 90 or so miles that separates Key West from Cuba. The Caribbean might be an American lake, but so is the Mediterranean, the Baltic, and the Sea of Japan. Ominous threats made by Russia, China, or Iran against their neighbors are treated as synonymous to threats to harm Americans. Every ungoverned place, everywhere in the world, you will be told, poses a dire and imminent threat to your safety and security, hence our need to fix them all. (For why this generally isn’t true, see here.)

Throughout the supposed impending discussion of our military’s roles and missions, the role that other countries should play in keeping the seas open and free, defending themselves from potentially hostile neighbors, and preventing terrorists and other non-state actors from setting up shop in a nearby land, will rarely be entertained. For many people here in Washington, that is entirely by design: they don’t want other countries to defend themselves and their interests around the world. Better that you, the U.S. taxpayers, pay these costs. To do otherwise, to reduce U.S. military spending, and to pull back our forces from certain regions around the world, thus “leaving partners elsewhere in the world to manage for themselves as best as they can,” wrote Robert Haddick yesterday at the Small Wars Journal, would result in “regional arms races, increased nuclear and missile proliferation, and the establishment of new outposts around the world by America’s rising rivals.”

Haddick is not alone in predicting that the world will descend into complete and utter chaos if other countries were responsible for defending themselves and their interests, but all such assertions are precisely that: assertions, not fact. They rely on dire predictions of a horrible future, usually based on historical examples that are completely irrelevant in the modern age, to convince American taxpayers to pay more and more, and still more, on our military, so that others do not have to spend money on theirs. What’s more, they tend to ignore the current fiscal crisis, and are generally reluctant to explain what, if anything, they would cut. So far, fearmongering has worked splendidly to distract attention from the more important discussion of what we spend today, and what we should spend tomorrow. But the facts are incontrovertible: Americans now spend more on our military than at any time since World War II, and we spend far more on a per capita basis than anyone else in the world.

So Happy Tax Day, Americans! Our reassured allies thank you for paying to defend them and their interests. (And please now excuse them as they return to their other priorities.)

Cross-posted from The National Interest

Happy Tax Day! Rest Assured. Your Money Is Well Spent Defending Rich Allies is a post from Cato @ Liberty - Cato Institute Blog

OMB director Peter Orszag is blaming the inefficiencies of the federal government on outdated personal computers. That is hard to understand given that federal IT spending amounted to $200 million a day last year.

A new GAO report on cost overruns at the Department of Energy undercuts Orszag’s argument that the solution to government incompetence is new computers. DOE cost overruns are nothing new. As far back as 1982 the GAO was reporting that “DOE lacked sufficient guidance to provide to its contractors for developing cost estimates.” A 2007 GAO report found that eight of 12 DOE projects it examined had exceeded their initial cost estimate by almost $14 billion due to “ineffective DOE project oversight and poor contractor management.” In 2008, GAO reported that nine out of 10 environmental cleanup projects it examined had cost overruns that DOE estimated would require an additional $25 to $42 billion.

For the new report, the GAO looked at DOE’s contract management procedures and here are some of the highlights:

• “DOE has not had a policy that establishes standards for cost estimating in place for over a decade, and its guidance is outdated and incomplete, making it difficult for the department to oversee the development of high-quality cost estimates by its contractors.”

• “DOE’s only cost-estimating direction resides in its project management policy that does not indicate how cost estimates should be developed.” (This statement has to be read several times to actually be believed.)

• “DOE’s outdated cost-estimating guide assigns responsibilities to offices that no longer exist.”

• “DOE does not have appropriate internal controls in place that would allow its project managers to provide contractors a standard method for building high-quality cost estimates.”

• “DOE has drafted a new cost-estimating policy and guide but the department expects to miss its deadline for issuing them by more than a year.”

There’s nothing here that a supercomputer is going to change. Cost overruns in government programs will continue to occur for the simple reason that policymakers and administrators are playing with other people’s money. Moreover, the market forces that compel private firms to manage resources effectively or risk going out of business (unless they are in the auto or finance industries) are absent. DOE won’t be put of business for its cost overruns (although it should be); it’ll just go ask Congress for more taxpayer money.

See this Cato essay for more on cost overruns at the Department of Energy and other government agencies.

Cost Overrun Incompetence at Energy is a post from Cato @ Liberty - Cato Institute Blog

In 2007, the Advanced Technology Vehicles Manufacturing Loan Program was created in the Department of Energy to support the development of advanced (i.e., “green”) technology vehicles. Last year Congress appropriated $7.5 billion to support a maximum of $25 billion in loans. So far, the subsidies have been dished out to Ford ($5.9 billion), Nissan ($1.6 billion), Tesla Motors ($465 million), and Fisker Automotive ($528 million).

Darryl Siry, a former official at Tesla, has written a piece for Wired that illuminates a fundamental problem with the government trying to pick winners and losers in the marketplace:

To the recipients the support is a vital and welcome boost. But this massive government intervention in private capital markets may have the unintended consequence of stifling innovation by reducing the flow of private capital into ventures that are not anointed by the DOE.

Private investors, such as venture capitalists, make investments based on perceived risk and expected financial returns. Companies with government backing are more attractive to investors because government support “amounts to free leverage for the venture capitalist’s bet” given that “the upside is multiplied and the downside remains the same since the most the equity investor can lose is the original investment.”

According to Siry:

The proposition is so irresistible that any reasonable person would prefer to back a company that has received a DOE loan or grant than a company that has not. It is this distortion of the market for private capital that will have a stifling effect on innovation, as private capital chases fewer deals and companies that do not have government backing have a harder time attracting private capital. This doesn’t mean deals won’t get done outside of the energy department’s umbrella, but it means fewer deals will be done and at worse terms.

Siry concludes that a solution to avoiding these market distortions would be to “cast the net more broadly” by giving subsidies to more companies. That’s where I part ways with his analysis. The real solution is to get the Department of Energy out of the subsidy business – and energy markets – altogether.

Stifling Innovation by Subsidizing It is a post from Cato @ Liberty - Cato Institute Blog

Try as they might, supporters of big government spending cannot make federal programs work very well. The Department of Energy, for example, has been plagued by mismanagement, cost overruns, and scandals for decades.

Today, the Washington Post reports on the poor performance of DoE’s environmental clean-up programs. As I reviewed in the linked essay, these enormously costly programs have been plagued by mismanagement for at least 25 years. Last week, Lou Dobbs lambasted DOE’s National Ignition Facility in California for its huge cost overruns (Hat Tip: Harrison Moar).

I summarize these costly projects and other DoE boondoggles here. With bipartisan support for increases to energy subsidies, we can expect a raft of bipartisan boondoggles developing over coming months and years.

Energy Mismanagment is a post from Cato @ Liberty - Cato Institute Blog