German Economy Booming

[highsea]

Never said "can only afford". Said it's a lot easier.

We spend 5% GDP on defense, Germany spends 1.3%. The rest of Western Europe is similar.

We could shift those hundreds of Billions annually over to social programs, it would leave you guys footing a much bigger slice of your defense.

Simple arithmetic.

[kato]

Also German military spending was quite a bit higher until the end of the cold war

Not that much. 3% of GDP, consistently, from the 1960s to the 1980s. Conscription is cheap. The problem near the end was more that certain countries didn't want to pay their share (WHNS forces for the USA come to mind - only existed on paper because the US kept dragging out payments for their equipment).

We could shift those hundreds of Billions annually over to social programs, it would leave you guys footing a much bigger slice of your defense.

There isn't a single thing the US is doing for Germany militarily these days. In fact, Germany is actually subsidizing the USAF logistics platform and the US Army trainings platform that is effectively all that US presence in Europe is nowadays.

Sure, we can take stuff like Afghanistan into account. But the kicker there is that Germany wouldn't even be there if it wasn't for the alliance with the US. The US isn't helping out Germany there, Germany is helping out the US. The Balkans? If we weren't engaged in Afghanistan, we could just shift one third of what we have there into Kosovo and take over the US sector. Or we could just do away with the KFOR OTH Reserve Force and deploy those troops that are tied up by it directly into Kosovo.
A US retreat from Europe would mostly affect its new vassals - "New Europe" as it was so quaintly termed. And with the German quasi-alliance with Russia (in particular regarding politics towards the pro-US countries inbetween), that would be rather fun. There's are two areas within Germany that would be affected by the closure of bases - North Bavaria and Western Palatinate. Both of these regions are already the poor house of West Germany, and have been so for the past 150 years. Not much of a loss, and nowhere near the bill we had to foot for 2+4.

[highsea]

...There isn't a single thing the US is doing for Germany militarily these days. In fact, Germany is actually subsidizing the USAF logistics platform and the US Army trainings platform that is effectively all that US presence in Europe is nowadays.

The 2010 QDR called for 4 BCT's remaining in Germany, some 30,000 troops.

This has changed?

The list of US installations in Germany is extensive. The USAREUR website lists at least 20. Wiki lists a lot more.

When we talked about drawing this down a couple years ago, I recall a lot of squawking from Germany about the harm it would do to local economies...

[Doktor]

There's actually a rather openly (apologist) stalinist party in Germany (not in federal parliament, only a couple city councils), and at least two of the six parties in parliament have communist subgroups with maoist leanings. ;)

The German current political system at its core is "anti-capitalist". Five out of six parties in parliament have definitive anti-libertarian statements in the sense of restricting capitalist expansion for the greater good in their programs (the sixth actually does too, although only to a limited extent). And the constitution does have that little line that says that "property obligates".

Few years ago I had contacts with one of the biggest German publishers (Axel Springer).

With one of the employees there we had regular contacts few times a week and become friends. What I found interesting is two things: 1) I have witnessed German efficiency first hand (so it's not a myth, now I have to visit Japan) and 2) She was on holidays every 2nd week for a couple of days. I was thinking "These guys are living socialism at it's best and THEY ARE WESTERN GERMANS".

[Tarek Morgen]

The 2010 QDR called for 4 BCT's remaining in Germany, some 30,000 troops.

This has changed?

The list of US installations in Germany is extensive. The USAREUR website lists at least 20. Wiki lists a lot more.

When we talked about drawing this down a couple years ago, I recall a lot of squawking from Germany about the harm it would do to local economies...

uh yes there still US Bases in Germany and closing them would/will hurt the local economy wherever they are (just like closing Bundeswehr Bases does), but that does in no way mean that Germany would have automatically have to increase its defence spending if they are gone. It is not like those towns would be taken over by rebels without any military presence (US or otherwise)...(and besides that the US simply needs at least some of those bases and can't them replace over night, like Ramstein).

So I have to ask how would the reducement/withdraw of US troops from Germany force Germany to increase its defence spending?

[highsea]

So I have to ask how would the reducement/withdraw of US troops from Germany force Germany to increase its defence spending?

It's not just a matter of x number of US bases in Germany- although there are some people in the US asking why we should maintain that level of forces, at a time when Germany is reducing their own.

For the past 6 decades Western Europe has lived under the US security umbrella. Absent that, ALL of those countries would have had to spend a lot more on their own defence, either individually or collectively.

Or learn to speak Russian.

You wouldn't have the luxury of spending a paltry 1.3% of GDP. More likely you would be in competition with each other for power.

As our own budgetary pressures increase, we will be forced to re-evaluate our own military posture. We won't put the burden on the troops, which means we will reduce their mission.

How much remains to be seen.

In any case, this thread isn't about US military spending. It was about Germany's economy. I only pointed it out because it's a cost that we shoulder that you don't have to.

Yes, Germany's economy doing well. Germany protects her industrial base- something I wish we were better at. Her trade policies would be called protectionism if they were practiced in the US.

How much did the US Federal Reserve give to the European central banks to shore up the Euro? Somewhere around a trillion dollars. I'm sure that hasn't hurt, and if the Euro goes to shit it will be the US taxpayer that picks up the tab.

Point being, "German efficiency" as compared to the US is a myth. It's policies, not practices that make the difference. If we did nothing more than institute an import/export VAT that matched yours, the trade balance would reverse practically overnite.

[Doktor]

...If we did nothing more than institute an import/export VAT that matched yours, the trade balance would reverse practically overnite.

I am curious (not cocky) why you are not doing that? Over protectionism critics, some agreements you have signed or there is another thing?.

Edit: Considering your comment on US loan to European banks, if that's the case, why you loan borrowed money (from China)?

[gunnut]

Few years ago I had contacts with one of the biggest German publishers (Axel Springer).

With one of the employees there we had regular contacts few times a week and become friends. What I found interesting is two things: 1) I have witnessed German efficiency first hand (so it's not a myth, now I have to visit Japan) and 2) She was on holidays every 2nd week for a couple of days. I was thinking "These guys are living socialism at it's best and THEY ARE WESTERN GERMANS".

Japanese are extremely punctual, not necessarily efficient. The entire Japanese social philosophy is to keep group harmony. That can result in high inefficiency.

[highsea]

I am curious (not cocky) why you are not doing that? Over protectionism critics, some agreements you have signed or there is another thing?.

Edit: Considering your comment on US loan to European banks, if that's the case, why you loan borrowed money (from China)?

Both very good questions.

I guess the answer to each is the same- the US gov't worships at the altar of "globalism".

[highsea]

Japanese are extremely punctual, not necessarily efficient. The entire Japanese social philosophy is to keep group harmony. That can result in high inefficiency.

As manufacturers they are quite efficient. All modern industrial countries are. We all have the same access to the same machinery, etc.

The Japanese made some pretty good innovations though- their luxury car lines were created completely out of excess capacity of existing plants. They ignored the traditional cost accounting methodology, and built the entire product lines based solely on marginal costing. It was brilliant.

They also invented JIT, which is a boon to cash flow management if you are large enough to really take advantage of it.

[Bigfella]

Social safety nets are much easier to offer up when someone else is providing for your national defense. ~5% US spending vs. 1.3% Germany spending and no support for ongoing NATO operations.

All of western Europe has enjoyed 60 years of US providing for their security. Easy to portray yourself as morally superior and compassionate to your own citizens when someone else is footing the cost of defending your liberty.

Thank you. I had a bet with myself that some American would chime in with this at some point. As predictible as the sun rising. The German system cannot work, therefore a way must always be found to demostrate that it does not, or that it is 'cheating'. Alternatively, simply claim it 'isn't as socialist' as less successful economies (going back to the beginning). The facts must be made to fit the theory...somehow.

[Bigfella]

As manufacturers they are quite efficient. All modern industrial countries are. We all have the same access to the same machinery, etc.

The Japanese made some pretty good innovations though- their luxury car lines were created completely out of excess capacity of existing plants. They ignored the traditional cost accounting methodology, and built the entire product lines based solely on marginal costing. It was brilliant.

They also invented JIT, which is a boon to cash flow management if you are large enough to really take advantage of it.

Don't forget their early embrace of Quality Control philosophies.

[Doktor]

Disagree. You're alluding to the Clinton years? 1992 outlays 1.38 trillion. 2000 outlays 1.76 Trillion.

Social safety nets are much easier to offer up when someone else is providing for your national defense. ~5% US spending vs. 1.3% Germany spending and no support for ongoing NATO operations.

All of western Europe has enjoyed 60 years of US providing for their security. Easy to portray yourself as morally superior and compassionate to your own citizens when someone else is footing the cost of defending your liberty.

This is all true, but I guess (since I couldn't find the data) the western Europe's military budgets were close to US in terms of %GDP, for the period of 1945-1990. Also, If you do find the data note that Germany wasn't allowed to send troops abroad while US were engaged in every corner of the world spreading or defending democracy.

Now, that there is no imminent threat requiring robust armies why not to relocate the money to other things the citizen need? Won't you expect the same from your Government?

Entertainment industry did a great role in spreading democracy in the past. What changed? Why not investing there and in another US biz more?

[kato]

The 2010 QDR called for 4 BCT's remaining in Germany, some 30,000 troops.
This has changed?

These BCTs are only using Germany as a homebase for deployments to Afghanistan, Iraq and otherwise.

The list of US installations in Germany is extensive. The USAREUR website lists at least 20. Wiki lists a lot more.

Most of those are right next to each other. There's a cluster around Kaiserslautern and Ramstein that's the size of Fort Bragg and nominally something like 7 or 8 different installations; in Northern Bavaria (Grafenwöhr etc) a similar-sized cluster is a bit further spread out around some giant training grounds; there are two separate command bases in Wiesbaden (future USAREUR HQ) and Stuttgart respectively (EUCOM and AFRICOM), and there's the cluster here in the Rhine-Neckar area that's being given up between now and 2015.

When we talked about drawing this down a couple years ago, I recall a lot of squawking from Germany about the harm it would do to local economies...

Only small town economies are really affected by it, much as they are by the Bundeswehr consolidating its 1000+ installations into about 120 over the past couple years.

The region i'm living in is losing ~25,000 US soldiers dependents over the next five years, the third-largest US force concentration in Germany. The effects on the economy are barely noticable, and are in the sub-promille range, GDP-wise. The US military in Germany supplies itself, only few live and shop "on the economy" - the average US MILID holder living in Germany brings the country about 8% of the per-capita GDP of a German citizen.

For the past 6 decades Western Europe has lived under the US security umbrella. Absent that, ALL of those countries would have had to spend a lot more on their own defence, either individually or collectively.

There was that little geopolitical change 20 years ago that changed quite a lot. Geopolitically speaking, Russia is currently as important an ally to Germany as the US.

Yes, Germany's economy doing well. Germany protects her industrial base- something I wish we were better at. Her trade policies would be called protectionism if they were practiced in the US.

Actually, Germany is barely protectionist at all in the international game. Up till a few years ago, there were zero protections against foreign takeovers other than in the defence industry. Protections were enacted since then primarily to protect against US-based hedge fonds.

How much did the US Federal Reserve give to the European central banks to shore up the Euro?

Umm, that wasn't a plan to "shore up the Euro", that was a plan to effectively stabilize the Dollar as a reserve currency by using European Central Bank as an agent to spread out dollar reserves to smaller banks. That was partially a reaction to China threatening to convert a similar amount of Dollars into Euros the previous year.

[astralis]

highsea,

Disagree. You're alluding to the Clinton years? 1992 outlays 1.38 trillion. 2000 outlays 1.76 Trillion.

About the only significant cuts were defense spending. Going by dept, there were some that were flat, but very few that had reductions. The increases far outweighed the reductions.

going by outlays alone is not meaningful- the US population in 1992 was 255 million, with a GDP of $8.1 trillion. by 2000 the US population was 281 million, with a GDP of $11.2 trillion.

government spending as percent of GDP went from 37% to barely over 32%.

federal payroll size went from 3.04 million to 2.89 million in the same time, despite the population increase.

I think we are severely disadvantaged by tax and trade policy, to such a level that we are not competitive due to those policies. Examples the VAT differential and corp tax rates. I have to be at least 20% more efficient to just have a level playing field in my own country, let alone overcoming the export barriers.

really? using the heritage foundation's economic freedom/business friendliness index, the US is number 9 with a score of 77.8. germany is number 23 with a score of 71.8.

moreover, if things were so out of whack, i'd expect the US to go to the WTO, as we have against china...and for that matter, against canada.

Social safety nets are much easier to offer up when someone else is providing for your national defense. ~5% US spending vs. 1.3% Germany spending and no support for ongoing NATO operations.

finally, i've seen this argument many times. between 1945 and 1991, keeping german defense spending down was one of the functions of NATO: as the first NATO sec' gen said: "keep the americans in, the russians out, and the germans down."

moreover, US defense spending wasn't, and isn't, charity: it is because we americans made the decision to spend our money thus, because we felt it would increase OUR security. we're not doing it for the sake of others.

anyhow, this is somewhat beside the point. germany (and for that matter quite a few scandinavian countries) still stands as a glaring counterpoint to the conservative assertion that left-wing/more socialist policies automatically equates to gasping death for business and competitiveness.