Reducing America’s defense budget would be a mistake

The Pentagon’s proposed defense budget cuts, which include plans to reduce the Army to pre-World War II levels, have been widely covered throughout the media. As often is the case with such announcements, there is no shortage of varying opinions being bandied about. But beyond all the rhetoric, the fact remains that we live in a dangerous world and face threats that continue to evolve, becoming increasingly perilous every day.

We would all like to believe that the contemporary world we live in is beyond the risk of the global slaughter of over 20 million people that occurred throughout World War II.

My father was a Holocaust survivor. Like all Holocaust survivors, he witnessed atrocities and horrors that are simply incomprehensible for us as Americans, having never experienced such carnage firsthand. Before he passed away, my father told me that in the years preceding the onslaught of WWII, citizens of Germany and Poland believed themselves to be a part of a very sophisticated society — educated, cultured, almost superior. To them, just prior to WWII the unspeakable savagery which ultimately occurred throughout the war was inconceivable.

Formulating the notion of the Holocaust in advance would have been laughed off as the most egregious of hyperbole. Such a thing, even as the war made its insidious emergence, was viewed as impossible among such advanced and cultured nations. That mindset is very much a reflection of the way in which we view the world today. Before my father’s passing in 2008, he asserted that when comparing Europe in the 1940s to present-day America, the current world landscape is in fact more perilous, with a greater likelihood of experiencing unthinkable atrocities. There are a number of reasons why such a perspective should be considered prudent.

On a global scope, unfortunate as it may be, extreme prejudice exists across cultures, religions and even sects within a country. Any impetus behind war, whether it be greed, power or hate, is no less prevalent today than 70 years ago. We live in an age where the existence of far more sophisticated weaponry and advances in science and technology leaves us vulnerable to those desiring war. An effective military is even more necessary today than during WWII because of the proliferation of terrorist organizations with access to tremendous amounts of money and resources, which are now able to obtain weapons with a much greater impact — whether they be atomic, chemical, biological, etc. Scores of enemies are born daily with seemingly little to live for themselves, and willing to give their lives for their cause. If there is no threat of opposition to these rogue groups, they could wield incredible destruction on the world, including within the U.S.

Without America’s participation in WWII, the world today would almost certainly be an entirely different landscape. Mass genocide would have continued unchecked for a much longer period of time, leaving one to wonder what the evolution of the world would have been had America not been in a position to act effectively. The same holds true today should America become lax in its defense initiatives.

A common argument in support of cutting the defense budget entails comparing the size of the U.S. defense budget (in dollars) to that of other countries. It is fairly common knowledge that the U.S. spends more on defense annually than the next 10-12 countries combined, many of whom are considered allies. On its face, this might be considered a fair argument. However, the size of a nation’s defense budget in absolute dollars isn’t relevant without considering other factors.

In order to have an apples to apples comparison, one would need to take into account several factors, and then adjust for each. For instance, the wages paid to soldiers (if any) in that county, the military budget as a percentage of the country’s GDP and tax base, how much of the military budget is comprised of funds being pumped right back into the economy, and the impact of R&D spending are but a few factors that need to be considered.

But most importantly, each nation’s population, and the value they place on it, must be considered. The U.S. places a premium on human life. This is in stark contrast to what we see in many other countries, which place little to no value on human life. Genocide remains rampant throughout the world for a multitude of reasons including intra-nation political strife. Our military exists to defend all Americans, not a select few. The greater the nation’s population — combined with their emphasis on human life — the greater the cost. Soldiers are heroes, and nobody denies the fact that they should be paid more. But the U.S. actually has one of the highest paid militaries in the world. When assessing the defense budget, it’s important to consider American values and the way in which we compensate our soldiers — through wages as well as opportunities for continuing higher education at no cost. These are expenses most other countries either do not account for, or do so on a much lower scale.

Moreover, the threat level posed to a nation by terrorist organizations and rogue nations can’t be quantified into dollars or explained via a budget’s bottom line. Regardless of whether or not other nations have defense budgets that are only a fraction the size of America’s, they simply do not face the same threat as that posed to the U.S. It’s a false equivalency to suggest one nation’s defense spending can be compared to another’s simply by looking at a balance sheet.

There is relatively no debating or arguing the notion that peace is the preferred method of conflict resolution. In a perfect world, negotiations and diplomacy are all that need be required to settle inter-nation conflicts. However, certain existing factions are not interested in peace. Period. Their interests are the ultimate destruction of their enemies, often willingly at the demise of themselves. The only factor that keeps such groups in check is the threat of opposition. Without the sufficient threat of opposition, factions intent on the destruction of their enemies have no reason to consider the consequences of their actions.

Additionally, a solidified and well-funded American military is necessary not just in the interest of America, but in the interest of the world. America places great priority on all human life, not just the lives of its citizens. When considering recent history, America hasn’t used its military capabilities for personal or economic gain, but merely to protect itself and its allies from outside threats. The U.S. could have easily gone into other lands throughout the years, taken them over and kept the spoils of war, but that has never been its interest. Our military is unique in that it has historically been utilized for either self-protection or to help others in distress. That doesn’t mean we were successful in each case, but our interest was in protecting persecuted populations and maintaining our security at home.

Furthermore, although a frequently unpopular sentiment, the economic benefits of a well-armed military should be noted. Historically, when observing the impact of defense spending on the economy (adjusting for the economic trends occurring at a given time), a positive impact has occurred in virtually every instance. Why?

When the government spends money on defense, virtually all of it is pumped directly into the national economy. The money is taken out of the government and put back into circulation where it reaches the companies that manufacture and develop the equipment, their personnel, the soldiers, etc. Circulation is the essence of a healthy economy. The structure of the defense budget and the way in which the funds are distributed ensures continuous circulation within the economy.

Additionally, the benefit of technological advancements cannot be overstated. The military pumps huge amounts of money into research and development. Some of the greatest advances in science over time have been a direct result of military funding. This includes space travel, advancements in electronics and technology such as robotics and prosthetics, computer science, and more. The military has (and continues to) funded many projects that would otherwise be very difficult to maintain because they require long development cycles and advanced lead times.

So in addition to the necessity in having a daunting military to dissuade our enemies from potential attacks, there is a net economical benefit to the country in having a strong and well-funded military.

The world is more dangerous than ever before, and nothing about that fact is going to change in the near future. If anything, the threat level is escalating. There is a palpable risk of war throughout the world, and a much greater risk that we might find such a threat at our doorsteps. We as a nation are not impervious to such threats. The only way to ensure that such a scenario does not occur is to extend our defense presence to the various fronts with the potential to harm us. Such a strategy is expensive. It’s also absolutely necessary.

David Bergstein is the CEO of Cyrano Group. He is a board member of the Sheriff’s Youth Foundation, an organization dedicated to providing Los Angeles County youth with safe facilities, planned programs, and the vital tools they need to thrive and succeed in life. He is founder of the Leonard and Sarah Bergstein Learning Center at the Conejo Jewish Academy.

About the Author
David Bergstein is a financier who specializes in locating, securing financing for, and restructuring companies which are undervalued, distressed, and have complicating or litigious factors in their history. He is known for his talent in accurately predicting trends and recognizing opportunities to restore and reposition businesses. With experience in numerous fields including: Internet, medical, distribution, biomedical, film and many more, Bergstein is a leading expert in the field of financing. Bergstein is also an investment banker and entrepreneur, having purchased and grown several companies such as De Lane Lea, a formerly insolvent London post-production facility which he turned into a thriving and profitable enterprise in less than five years, eventually selling it to Warner Bros. Born August 9, 1962 in New York City, Bergstein grew up with an incredibly influential father, a Holocaust survivor who overcame great adversity in his life. His father became a renowned engineer, patenting inventions such as the Zoom lens and pioneering research which formed the basis for the fiber optics industry. After graduating high school early, Bergstein attended the Polytechnic Institute of New York University (now NYU) where his father was a professor of engineering. During his time at Polytechnic, Bergstein earned a B.S. in pre-med with a math minor, and then attended law school at Cardozo University. While in law school he worked at Solomon Brothers under Joseph Stechler, and later as a research analyst at Bear Sterns, spending the majority of his time locating, analyzing and reporting on undervalued situations. In 1984, Bergstein moved to California where he began buying and selling real estate, eventually progressing into real estate development. He enjoyed remarkable economic success during this period, and further developed his exceptional ability to identify assets with latent potential for growth. Around the time of the housing market collapse, Bergstein switched gears and began applying his transactional skill set to the business world. Bergstein then acquired a company in the Garment District in Downtown Los Angeles. He revitalized the company back to profitability and sold it within a year, marking the beginning of his success as a financier. In 1994 Bergstein formed Graybox, which later became Cyrano Group Inc. Gyrano Group frequently invests the majority of capital required for its transactions, and is capable of acting as both an effective broker and in a consulting capacity, providing specific services which may be unrelated to capital investment. As company CEO for the past 20 years, Bergstein has handled a wide array of transactions, spanning many fields and ranging in size from $5 to $1.5 billion. Bergstein founded the Leonard and Sarah Bergstein Learning Center at the Conejo Jewish Academy, in honor of his parents. He serves on the Board of Directors for the Sherriff’s Youth Foundation of Los Angeles County, an organization dedicated to offering homeless and disadvantaged youth safe facilities and resources. Bergstein also serves on the board at the Grossman Burn Foundation, a nonprofit organization dedicated to promoting effective solutions for comprehensive treatment, care, financial aid and support of burn survivors and their families.
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