Is US grand strategy self-defeating? Deep engagement, military spending and sovereign debt

Abstract

Questions regarding the economic consequences of US grand strategy have gained new salience. This article provides an empirical test of the relationship between US military expenditures and public debt and clarifies the real constraints the US faces issuing debt. Neither results from the statistical analysis nor the economic theory of sovereign debt support the retrenchment position regarding the impact of military spending on public debt (1973–2015). Tax cuts are the most significant determinant of debt not military spending, social benefits or interest payments. Evaluating new hypotheses about alternative mechanisms through which military spending may damage the economy remains a priority.

Accidental rivals? EU fiscal rules, NATO, and transatlantic burden-sharing

“…Resource allocation is a strategic choice (Norrlof & Wohlforth, forthcoming; Posen & Ross, 1997), power over which is foundational to social ordering among states (Galtung, 1969). Members of the transatlantic security community (Risse, 2016) influence one another’s defense spending through both NATO and the EU, the main institutions of a transatlantic security complex (Lake, 2009).…”

“The persistent myth of lost hegemony,” revisited: structural power as a complex network phenomenon

“… 19. Norrlof and Wohlforth (2016) show that US military expenditure does not lead to fiscal over-extension; this is almost certainly due to the United States’ ability to issue “risk-less” sovereign debt into global capital markets, and this unique ability is closely tied to its dominance within the monetary system. …”