‘Arms’ or ‘Economic’ Aid

December 10, 1951

The central fact about our so-called “arms aid” to Europe is that it is only another name for general economic aid.

When the United States Government gives $5,000,000,000 for defense to European governments, either in the form of cash or military end items, then—unless Europe’s total armament budget shows a net increase of at least $5,000,000,000 over what it would have been if we had made no contribution—we have simply released Europe’s own funds for other governmental expenditures (such as social security, food subsidies, deficits on nationalized industries), or we have allowed European governments to reduce taxes by that much.

The only way we could make sure that none of our funds intended for European rearmament were being in effect diverted to other purposes would be to insist on a minimum defense expenditure by each government and a ceiling on all its other expenditure. Even this would not be enough; we should have to assume detailed supervision. The New York Times reported on Nov. 28, for example, that our officials are finding “an immense amount of waste in European defense expenditures—installations designed to prevent a German invasion of France that make no sense in terms of present-day problems, unneeded Navy outlays, expenditures on obsolete arms and services,” etc.

But no responsible person would dream of recommending that our officials should dictate European budgets. We still face the dilemma to which I devoted an article in Newsweek of Nov. 3, 1947; If we give aid without imposing conditions, it will be dissipated without bringing the results we seek; if we try to impose the necessary conditions, the attempt must bring immediate resentment and ill will.

The argument is frequently put forward that the reason we need to give military aid to Europe is that Europe cannot make the items it requires. This argument is empty. Europe could simply buy the goods from us, as we buy the rubber, tin, and wool we do not ourselves produce. The argument for our military- aid program is basically economic—that Europe just can’t afford to pay for its own rearmament. Let’s see. As no figures are available of our proposed military aid to individual countries, we are compelled to deal with overall figures. The overall “gross national product” of Belgium, Luxembourg, Denmark, France, Iceland, Italy, the Netherlands, Norway, Greece, Turkey, and the United Kingdom is estimated at $128,000,000,000. Total governmental expenditures of these countries this fiscal year will come to about $30,000,000,000. Of this, $8,600,000,000 will be for defense. In other words, these countries are spending on defense less than 30 percent of their total governmental expenditures and only about 7 percent of their national incomes.

On what assumption, then, are we contributing $5,200,000,000 in arms aid? On the assumption that these countries can neither (1) increase their expenditures on defense to 11 percent of their gross national product; nor (2) reduce their nondefense governmental expenditures from $21,400,000,000 to $16,200,000,000 and use the saving for defense; nor (3) increase their national product by 4 percent.

The American public has never been given the factual basis, if any, that supports this remarkable conclusion. The Congress that voted the money wasn’t even curious enough to ask for the factual basis. The Senate Appropriations Committee, before voting for the $7,300,000,000 overall foreign aid program, held hearings for just one day! Who cares for $7,300,000,000? After all, it is only equal to our total Federal expenditures for all purposes in the fiscal year 1938 and to the estimated 1952 deficit.

For purposes of comparison with the European rearmament effort, the United States is spending this year (not even counting the military aid to foreign countries) $47,000,000,000 on defense, which is 14 percent of our gross national product and 68 percent of our total government expenditures.