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America's Military Build-Up Will Affect You

Date 02/03/2002
Fleet Street Letter | By Brian Durrant

The United States’ awesome military capability has to be seen to be believed. Take one of its aircraft carriers, the USS Enterprise, for instance. It is more than 350 yards long, with a 250-foot wide flight deck. It is higher than a 20-storey building and houses a crew of 3,200 just to run the vessel. In addition, there are 2,400 air personnel to fly and service the 70 aircraft on board.

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This "floating town" can speed across the ocean at 35 mph and is never unaccompanied. There is a cruiser, a host of frigates and destroyers in attendance along with a hunterkiller submarine or two. The cost of one such "battlegroup" task force is equivalent to a third of the entire defence budget of a medium-sized country.

The US has a dozen such battlegroups with one more, the USS Ronald Reagan, coming into commission this year. In terms of global reach, the US is in a league of its own. America’s military expenditure is probably over 40% of the world total. Comparative figures for China and India are 2% and 1% respectively. On top of this, US defence secretary Donald Rumsfeld has asked Congress for a further $48bn next year, equivalent to the planned total military spend of the UK and Italy combined.

The US’s military dominance is unprecedented historically. What are the implications of this state of affairs?

The power to go it alone

The US can do what it pleases militarily. There is no point in Europe wringing its hands about US predominance. Chris Patten’s charge that the US is in "unilateralist overdrive" is the voice of impotence. NATO is no longer a meaningful partnership and EU pretensions to being an autonomous superpower are clearly preposterous.

No other country has all four of these. Indeed NATO faces the equivalent of "military apartheid" with the US doing all the high tech fighting and its allies clearing up the mess afterwards, rather like a military wing of Oxfam.

Never before has the UN Security Council been so unbalanced in terms of military might. If America chooses to launch a major assault on Iraq, it will go it alone if it has to. The talk in the US is about when and not if. A recent Gallup poll showed that 88% of Americans favour action to remove Saddam Hussein. Even Colin Powell, regarded as a comparative dove within the Bush cabinet, insists he is in favour of "regime change" in Baghdad.

Another war looms next winter

The Pentagon is said to be planning an assault on Iraq involving 200,000 American troops. Next winter is the earliest feasible time because US forces will not want to wear protective clothing against chemical and biological weapons in the summer heat. America also needs to replenish its arsenals of cruise missiles and smart bombs deployed in Afghanistan. The big unknown is the nation’s stomach for heavy casualties. Military operations in Kuwait, Kosovo and Afghanistan have kept US fatalities to a minimum. Indeed, it has been rumoured that as Delta Force and the SAS were closing in on Osama Bin Laden in Tora Bora, the US command agonized about bodybags, allowing bin Laden to escape.

Protection from imminent danger

The US may be able to go it alone militarily but might not be able to do so financially. The US budget is lurching back into deficit. President Bush's "guns-and-butter" budget plan, involves not only a huge increase in defence spending, but generous tax cuts.

Similar fiscal policies under Ronald Reagan resulted in a yawning trade gap. America's trade deficit is already running at $400m a year. The dollar is riding high at the moment because foreign capital flows into the US are sufficient to cover this shortfall. But this cannot be guaranteed to prevail. In the 1960s and again in the 1980s, the US government engaged in a massive military build-up without asking their citizens to finance them through higher taxes. In both cases there was an upsurge in inflation, and eventually a sharp fall in the dollar, which in turn made inflation matters worse.

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Your capital is at risk when you invest in shares – you can lose you some or all of your money, so never risk more than you can afford to lose. Figures may refer to the past or be forecasts. Past performance and forecasts are not reliable indicators of future results. The FSA does not regulate certain activities, including the buying and selling of commodities such as gold. If in doubt about the suitability or taxation implications of any investment, seek independent financial advice.