On Subsidizing The World Versus A European-Style Welfare State

The United States has launched a satellite that will crash into an asteroid a year from now. The idea is to see how the asteroid responds, so that if some later asteroid is heading toward earth, mankind will have a way to deflect the threat.

This seems like a good idea: On my more optimistic days, I believe in saving the world.

Anyone who’s watching the news these days also knows that the United States is spending a few trillion dollars combating COVID-19, and a trillion more on basic infrastructure, and considering another couple of trillion on human infrastructure. Once we’re done with that, I can feel a trillion or two coming down the pike to protect against hypersonic missiles. Given that we’re spending all those trillions, why don’t we have a better system of social support for people in need? Other countries don’t have all that money to spend, but other countries seem to do better on social support. Among relatively rich Western countries, for example, only the United States does not provide universal health care. Where does the money go?

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To deflecting asteroids.

You don’t see Sweden deflecting asteroids, do you?

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Instead, Sweden provides health care for all.

Consider just a few of the many ways that the United States subsidizes the world, in addition to being the only country that’s trying to deflect asteroids.

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The nuclear umbrella.

From the end of World War II through today, the United States alone has provided a nuclear umbrella to deter others from unbridled aggression. A few other countries have a nuclear weapon or two, but only the United States flew bombers 24 hours per day for years to reduce the possibility of a first strike or, even today, possesses enough firepower to deter anyone anywhere.

That costs money, and only the United States is spending it. Add the cost of the world’s nuclear umbrella to the asteroid-deflection tab.

Stationing troops around the globe.

Germany, Italy, Japan, South Korea, the Middle East — you name it, the United States has troops there. To the tune of a couple hundred thousand active duty personnel.

Stationing those troops, and supporting them, costs money, and only the United States is stationing all those troops. Add that cost to the nuclear umbrella and asteroid-deflection tab.

Making the development of new medicines profitable.

It can take a decade or more, and millions of dollars of investment, to create a new medicine. Once that new medicine is created, it would be great to give the medicine away for free. But some country must make sure that companies turn a profit on developing new medicines, to be sure that someone actually creates the darn things.

Medicines are cheaper in other countries. That means the incentive to create new medicines is smaller in other countries. And, historically, companies in the United States have in fact created many of the new medicines that are used to treat patients around the world. We could probably pay Canadian prices for medicines in the United States, but American companies might then create many fewer medicines.

Add that to the stationing of troops, nuclear umbrella, and asteroid-deflection tab.

And, of course, the list of subsidies goes on and on.

I have two points here. (You were kind of hoping I had at least one, weren’t you?)

First, the aggregate cost of the many ways in which the United States subsidizes the world is huge — certainly hundreds of billions, and perhaps trillions, of dollars annually. A country that spends all that money on protecting the world has less money to spend on itself.

Second, all of these subsidies could easily be good policy. The nuclear umbrella and stationing of troops around the world has encouraged peace for the past 70 years. (Yeah, yeah: There have been lots of wars in the past several decades. But think about the wars in the decades, and centuries, that preceded the 1950s. The world is not entirely peaceful now, but it’s a whole lot more peaceful than it was before — despite the existence of far more lethal weapons.)

Ensuring the development of new medicines is critically important. If we don’t do it, someone should — and other countries would rather pay less for their medicines.

When an asteroid comes heading our way, everyone will probably appreciate that we know how to deflect the darn thing.

And the United States has an economy that permits us to do all this good in the world. (The United States also has a populace that extracts a heavy price from politicians who raise taxes.)

Please don’t wonder why the United States doesn’t provide European-style social services at the same time that it subsidizes the world. Even the world’s richest country has only limited supplies of cash.

Mark Herrmann spent 17 years as a partner at a leading international law firm and is now deputy general counsel at a large international company. He is the author of The Curmudgeon’s Guide to Practicing Law and Drug and Device Product Liability Litigation Strategy (affiliate links). You can reach him by email at [email protected].

Topics

America, Government, Mark Herrmann


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Originally posted on: https://abovethelaw.com/2021/11/on-subsidizing-the-world-versus-a-european-style-welfare-state/