booking versus accounting

beginning with a correction

A loyal reader sent me information allowing me to revise my columns last week in one manner. The St. Petersburg Conference on World Affairs is not a member of the world affairs councils I lauded on Tuesday through Thursday. The conference is just that—an annual conference to highlight up-to-date information with top-notch speakers on foreign policy questions but it is not part of that array of organisations I so highly respect. The Conference is yet another indicator of the craving across the nation for discussions on global affairs. Thanks to Mimi for her eagle eye and to you the readers for your patience. I made a leap that was unwarranted.

The big news in many quarters today is the unending revisionist fantasy heard Tucker Carlson received from Vlad the Impaler last week. Since Moscovy didn’t start until the thirteenth century, his certainty about behaviours in the 800s are dubious. It was a masterful disinformation opportunity by a KGB agent, after all.

For many conservatives in the United States, the focus shifted from the disinformation to the reality that the more than two dozen North Atlantic Treaty Organisation members are not paying their annual allocation of 2% of gross domestic product to pay for collective defense. In office, Donald Trump repeated his complete disdain for states bilking us rather than meeting their agreed upon spending levels. A commonly uttered slam is that if Europe can pay for the welfare states and the associated social spending much more pervasive in NATO members than here, then we should not pay for their defense (I am not sure whether the true emphasis is on NATO or antipathy towards to social spending). That criticism now permeates Republican supporters’ beliefs about the rest of the world abusing our good offices by forcing us to pay for keeping them safe as if it were a zero sum monetary calculation.

My understanding of NATO is the 2% figure has always been a target amount rather than a contractual obligation. That does not mean those who sign the Charter, then accept the invitation to join ought to willy-nilly ignore the amount they contribute in hopes someone else—almost invariably Washington—will make up the difference to assure the alliance is prepared should it need collective defense to kick in—as happened in September 2001 when NATO publicly—as they had signed up to do by becoming members—pledged to support U.S. defense following the 9/11 attacks. That NATO action was a remarkable one but met the letter of a collective defense agreement.

The words of the 1947 founding document, built on the Atlantic Charter originated by Franklin Roosevelt and Winston Churchill in 1941, mark their 75th anniversary this very April. Words matter as we so often discuss these days in other contexts as well so I include part of the text from a 2006 meeting where the sensitive question of funding became ‘settled’ appears below.

‘In 2006, NATO Defence (sic) Ministers agreed to commit a minimum of 2% of their Gross Domestic Product (GDP) to defence spending to continue to ensure the Alliance's military readiness. This guideline also serves as an indicator of a country's political will to contribute to NATO's common defence efforts since the defence capacity of each member has an impact on the overall perception of the Alliance's credibility as a politico-military organisation…

• Allies currently meeting the 2% guideline on defence spending will aim to continue to do so;

• Allies whose current proportion of GDP spent on defence is below this level will: halt any decline; aim to increase defence expenditure in real terms as GDP grows; and aim to move towards the 2% guideline within a decade with a view to meeting their NATO Capability Targets and filling NATO's capability shortfalls.’

The question left unanswered: do the guidelines equate to an iron-clad obligation from which no deviation is tolerated? What are the implications, if any, should a state fail to meet that level of spending?

President Trump between 2017 and 2021 attacked NATO members missing the 2% guideline statistic as he did in arguing that Japan and Korea each underpay for the bilateral security guarantees Americans provide those nations. Additionally, the touchy subject of whether the United States will honour its commitments if others fail to meet theirs has never arisen before since Americans have for seventy-five years viewed the NATO Alliance as more valuable than the dollars we invest above the 2% threshold required.

NATO helps keep us secure, in other words.

The conservative ire about others riding on the financial backs of U.S. taxpayers is hardly new under the former president. Arguably the single biggest reason that Americans grumble about the United Nations is that we are the largest bill payer, again based on having the largest GDP figures. Our concern is always that someone else is getting a much better deal than they deserve, viewing the benefits of the agreements in zero sum terms.

A substantial portion of the country does not want to pay for someone else through higher taxes, a wholly unsurprising perspective. However, that view underestimates the importance of being the single biggest contributor—thus voice—in any international organisation. As the largest contributor to NATO, for example, Washington automatically arrogates to itself the power to determine the overall military leadership which invariably go to Americans. The Supreme Allied Commander for NATO is an American rather than a German, the second largest contributors, or a Bulgarian. That leadership does not rotate out of the goodness of our hearts as it appears to many occurs when the Chairman’s position on the U.N. Security Council revolves among members. The United States has vastly the largest role in decision-making within NATO even when a European, such as Norwegian Jens Stoltenberg, serves as the Secretary General.

NATO is collective defense rather than unilateral U.S. run-defense, however. Americans occupy many top positions but the Alliance is built on an integrated network of 31 member states. If we assume it is truly collective, Americans should not be surprised that other nations hold leadership positions. Those positions also serve as incentives for the other nations to contribute financial to the Alliance’s coffers.

What Americans often forget, however, is that less tangible assets also result from being the single largest contributor to NATO. Much of the defense hardware throughout the thirty-one members is U.S.-built, adding to the U.S. incentives for participation. The balance sheet is not obvious, perhaps, but these hard assets (and associated defense contractors) along with U.S. defense civilians employed to support the headquarters in Belgium and at NATO bases are important benefits for Americans resulting from this agreement.

None of those lesser topics will satisfy the critics who feel the U.S. citizen is carrying too heavy a burden. The logical step is for the United States to renegotiate the treaty to attempt to balance expenditures but that appears highly unlikely since most European states prioritise social safety net items as highly, if not more so, than defense. On social spending, we are the outliers rather than Europe among developed states.

It’s not a matter of failing to hold Europe accountable as much as recognising the real value of NATO for Americans: we view it as a strong deterrent to any Russian aggression, preferring to stop any invasion on the Continent rather than elsewhere around the globe such as along our shores.

It is here that conservative’s position becomes most tenuous because of their assumption, despite Putin’s actions since 2008 in Georgia over South Ossetia and Ukraine over both the Crimea and the ‘Donbas’ region, that Putin is a benign force as he moves to recreate the Soviet Union. Put another way, those riled up about NATO spending see no overarching threat meriting U.S. spending on collective defense to address any unmet shortfalls by other states. The former U.S. president took this a step further yesterday by seeming to encourage Putin launching aggression against those underspending states.

Eleven countries, including the United States, meet the 2% threshold while 19 do not (Iceland actually has not military even as a NATO partner). Germany, France, and Italy are all large economies which perhaps surprisingly don’t spend to their 2% commitment; they frequently receive savage criticism for their spending lapses.

It’s shocking, however, to argue that the possibility, if not probability, of the very Russian aggression the world struggled so mightily to prevent between 1946 and 1991 could result by Americans saying they would turn their backs on allies in this matter.

The panel I spoke on last Wednesday discussing NATO and the Ukraine war received a question about whether defense spending—by which I assumed the query meant taxation to support our $850 billion annual budget for defense—would decrease if we pulled out of NATO. I responded that I doubt it, later adding I expect defense costs are actually going to rise in the near term because of so many concerns the U.S. armed forces are overstretched as it is.

I added that there are two ways to address this problem. We could raise taxes so more funding would be available although that is anathema to so many for understandable reasons. It is, however, an option for providing more funding to meet security shortfalls. Alternatively, we could decrease our global commitments. Donald Trump certainly has discussed this latter approach many times as he questions why we are involved in so many countries around the globe.

But here is the crux of the problem he would face. It’s not merely the ‘bureaucracy’ the Heritage Foundation seeks to reduce by 50,000 employees who help to determine our priorities. If we are a democracy with three co-equal branches of government, disputes will arise over where our national security concerns reside. Would we continue our support for Israel? Probably but no guarantees. Opposition to Iran? Undoubtedly but where would that rank versus China? Where would we put a breakdown civil society in Mexico caused by migrants left in their midst upon sealing the U.S. border as proposed? The list could grow, even if it currently appears that we are embracing isolationism.

Americans abandoned isolationism at the beginning of the twentieth century when our involvement in trade flowered. Today, regardless of the noble return to producing on our shores by some companies, we are both enmeshed and enriched by global trade. What threats to those benefits would result from actually pulling back from the post-World War II free trade arrangements, either deliberately or as a result of abandoning other global agreements setting the stage for that economic expansion?

Actions create consequences. The concerns voiced by critics of NATO lapses are valid but may not matter versus the greater effects of shifting our role in the world. In the end, the overwhelming majority of Americans assume we will retain the #1 position to which we are so accustomed by asserting it alone and being tough. Our role as the dominant state, however, in so many ways grew out of careful cultivation of many aspects of power, tools we appear willing to discard now as if they had failed or were unnecessary. Time will tell whether greatness results from closing the door or opening it more widely. But the key is not a simple look at the bottom of a bookkeeping sheet. The NATO, along with so many others, question about our actions is accounting rather than bookkeeping.

Accounting is a much more intricate system than a bottom line yes or no. We would do well studying the panoply of benefits and costs before we choose.

Thank you for reading today as you prepare for the Super Bowl. I welcome rebuttals, thoughts, and queries. I got a list of comments yesterday about Pakistan, all worthy of much consideration as to our link with that state. I also answered a great question about how I made sandwiches the other day after I broke the glass Friday: my sandwiches were toasted slices, slathered with hummus, dried chipotle peppers, and as much spinach as I could mount. Yum!! Please do chime in on any and all questions.

It’s been a morose winter day on the Creek so no stunning photograph today. But, it is still the Creek.

Be well and be safe. FIN

NATO, ‘Funding NATO’, www.nato.int, retrieved on 11 February 2024 at https://www.nato.int/cps/en/natohq/topics_67655.htm

World Population Review, ‘NATO spending by country 2024’, worldpopulationreview.com, retrieved on 11 February 2024 at https://worldpopulationreview.com/country-rankings/nato-spending-by-country