Can Someone Justify This Claim Dr. Paul Made?

[TortoiseDream]

http://www.youtube.com/watch?v=V19-uLzz8k4

Around 7:20, he says, "Why do we subsidize Germany, and they subsidize their socialized system over there because we pay for it. We're broke."

What is he talking about? A friend is asking. I know he started talking about troops overseas, but how does this translate into America paying for Germany's socialized system? Or am I misunderstanding him?

 

[tsai3904]

We subsidize their defense. If we didn't have troops there, Germany would have to spend more on their own defense.

 

[djruden]

http://wiki.answers.com/Q/How_much_foreign_aid_does_the_US_Government_give_away

A quick google search seems to indicate germacy also receives a fair amount of foreign aid. Add that to money we pay our troops stationed there that will end up spending much of it IN Germany.

 

[dante]

And our troops and military in these foreign countries spend their salaries in the local economies. It would be better if their salaries were spent in the USA

 

[low preference guy]

money is fungible. if someone's paying for your defense, you can use the money that you would've spent on defense to pay for your welfare state.

 

[specsaregood]

We subsidize their defense. If we didn't have troops there, Germany would have to spend more on their own defense.

That ^. Look up the term "fungibility" and how it relates to money. Also, fungibility is why most of the GOP supports defunding planned parenthood. so it is an accepted argument in GOP circles.

 

[mainstream economist]

1) Germany does not have to spend as much on national defense with the Americans there. Thus our presence is paying for their defense, and they use the savings to subsidize their social programs.
2) American military personnel spend money in Germany for both personal and official reasons. The shopkeepers in Germany then pay sales tax and income tax to their government using some of those American dollars, which again goes to subsidize their social programs.

There might be more...

 

[paulim]

http://www.youtube.com/watch?v=V19-uLzz8k4

Around 7:20, he says, "Why do we subsidize Germany, and they subsidize their socialized system over there because we pay for it. We're broke."

What is he talking about? A friend is asking. I know he started talking about troops overseas, but how does this translate into America paying for Germany's socialized system? Or am I misunderstanding him?

His point is that Germany would have to have more defense if the US forces weren't there. And the saved money is spent on welfare. You can certainly argue that way, although I think its overall wrong. First, because many countries pay certain expenditures for the US forces and as far as I know Germany does so too. Secondly, because all European states and especially the wealthy ones have allowed the US to have the world currency and big spending for a long time. Without argreement to devalue European currencies (and therefore wealth) along US spending, the US could have not projected power over the world for so long and have a wastefull welfare state at the same time. Thats at least how I see it.

 

[SpicyTurkey]

Really OP?

 

[InTradePro]

We subsidize their defense. If we didn't have troops there, Germany would have to spend more on their own defense.

^this

 

[69360]

1) Germany does not have to spend as much on national defense with the Americans there. Thus our presence is paying for their defense, and they use the savings to subsidize their social programs.
2) American military personnel spend money in Germany for both personal and official reasons. The shopkeepers in Germany then pay sales tax and income tax to their government using some of those American dollars, which again goes to subsidize their social programs.

There might be more...

Those are the big ones. You got it right.

 

[jdmyprez_deo_vindice]

I grew up a military brat and spent quite a bit of time in Germany. The way it works on a lot of foreign military bases is on top of our money being used to stimulate local economies around the bases and on top of handouts under the guise of foreign aid, the Department of Defense also pays a yearly "rent" to use the land that the bases/forts sit upon.

 

[Dr.3D]

There is also the money spent to provide food for those troops. When I was on a base back in the '70s, most of that food was brought in from the local area, rather than shipped in from the United States. Keeping troops in any country, is supplying that country with an income.

 

[kojirodensetsu]

It's kind of like even though the money can't be spent for abortions, the money Planned Parenthood gets let's them save money to where they can give abortions for free.

Basically, it's not subsidizing their socialism directly, but indirectly. We pay for their defense which means they can use the money they normally would have used for defense on socialist programs.

 

[TortoiseDream]

1) Germany does not have to spend as much on national defense with the Americans there. Thus our presence is paying for their defense, and they use the savings to subsidize their social programs.
2) American military personnel spend money in Germany for both personal and official reasons. The shopkeepers in Germany then pay sales tax and income tax to their government using some of those American dollars, which again goes to subsidize their social programs.

There might be more...

I'm going to play devil's advocate

1. How do we know that our troop presence has a significant effect? Is there some hard evidence to show that American troops have a significant effect on Germany military spending, or aren't you then just guessing how the German government would react to our troop presence. After all, don't they feel protected plenty by NATO and the EU?

2. So I looked up the number, the US has 52k troops in Germany. How can one claim that their spending is a significant effect on the economy? Germany is a large country with a large economy, 52 thousand people seems insignificant.

http://en.wikipedia.org/wiki/United_States_Armed_Forces

 

[JohnGalt23g]

I'm going to play devil's advocate

1. How do we know that our troop presence has a significant effect? Is there some hard evidence to show that American troops have a significant effect on Germany military spending, or aren't you then just guessing how the German government would react to our troop presence. After all, don't they feel protected plenty by NATO and the EU?

2. So I looked up the number, the US has 52k troops in Germany. How can one claim that their spending is a significant effect on the economy? Germany is a large country with a large economy, 52 thousand people seems insignificant.

http://en.wikipedia.org/wiki/United_States_Armed_Forces

First, we are NATO. Without us, Germany (and the rest of Europe) would have to spend more on their own defense. How much more? Who knows? Depends on a variety of factors at any given time. But unless they want to encourage Russian expansionism (some the Germans have been worried about for a couple of centuries), they would have to beef up their defenses to something near current levels.

Second, think about the GDP of a city with 52000 adults. That's essrntially what we do when we put that many troops in Germany. Except their only output is defense, and the entire bill is paid for by the US. Now, add on top of that all the labor required to make those military bases work, outside the actual soldiers. All the laundry, food production, entertainment, restaurants, etc. All those jobs are paid for by DoD dollars, or by the pay of the soldiers themselves.

All that benefit to their economy helps to subsidize all other publicly provided goods in Germany, including their welfare state.

 

[fisharmor]

I don't know, I'm kinda doubting, too.
The Bundeswehr has 247,100 active troops. By international agreement it can't go above 300k.
Germany covers 357,021 square kilometers.
That's a troop for every 1.44 square kilometers.
2010 population estimate is 81,799,600, meaning a troop every 331 people.

The US has 1,477,896 active duty, and 1,458,500 reserve.
That's a total of 2,936,356.
The US has a total land area of 9,826,675 square km,
making a troop for every 3.54 square km.
The US population estimate for 2011 is 312,481,000.
That's a troop every 106.4 people.

We have a much higher percentage of the population in uniform (remember this includes reserves, though, and doesn't count militarized police). But they slaughter us for covering their land mass.
Of course this also doesn't take the navy into consideration - navies represent a lot more projection of power than defense.

I don't disagree that they shouldn't be there. I think there are good philosophical arguments for pulling them - namely, that they have at least double the coverage of their land mass that we do, and would probably get away with breaking international agreement in dire need and get more.
But I'm not convinced we are subsidizing their socialism.

 

[1836]

http://www.youtube.com/watch?v=V19-uLzz8k4

Around 7:20, he says, "Why do we subsidize Germany, and they subsidize their socialized system over there because we pay for it. We're broke."

What is he talking about? A friend is asking. I know he started talking about troops overseas, but how does this translate into America paying for Germany's socialized system? Or am I misunderstanding him?

By paying for their defense, and aiding them in other ways, we reduce the amount they have to spend on military. As a result, they are able to put a higher percentage of resources into their socialized government programs.

 

[Feeding the Abscess]

It's kind of like even though the money can't be spent for abortions, the money Planned Parenthood gets let's them save money to where they can give abortions for free.

Basically, it's not subsidizing their socialism directly, but indirectly. We pay for their defense which means they can use the money they normally would have used for defense on socialist programs.

Just for chuckles, MSNBC and crew were screaming and wailing about Republicans using the fungibility argument, and then they were apoplectic on the issue of PACs/Citizens United with the same argument.

 

[Thomas86]

I'm going to play devil's advocate

1. How do we know that our troop presence has a significant effect? Is there some hard evidence to show that American troops have a significant effect on Germany military spending, or aren't you then just guessing how the German government would react to our troop presence. After all, don't they feel protected plenty by NATO and the EU?

2. So I looked up the number, the US has 52k troops in Germany. How can one claim that their spending is a significant effect on the economy? Germany is a large country with a large economy, 52 thousand people seems insignificant.

http://en.wikipedia.org/wiki/United_States_Armed_Forces

It's fine to play devil's advocate and all... but when you do it you should raise serious abstentions.

If I'm to take this argument (that even though we fund NATO and play world's policeman constantly - it MIGHT not effect German budgets) seriously... I have to take the stimulus package arguments seriously as well (that if government didn't spend things MIGHT be worse because if the spending was left to the private sector we would have mucked things up).

It's one of these "We can only use the data we can SEE.... we must ignore the UNSEEN..." - but this flies in the face of any reasonable analysis.