Murphy's Law: Protection Money


March 28, 2010: This year, Japan will pay for 70 percent of the cost of maintaining American bases in Japan, a contribution that amounts to over $4 billion. Japan has been making these payments since 1978. Because of this "host nation support," stationing American forces overseas has not always been as large a financial burden on the United States that it appeared to be. As the economies in West Germany, South Korea and Japan recovered after World War II, they all reached a point where the United States demanded, and got, payments from those countries to cover part of the expense of keeping American troops there. Since then, over a hundred billion dollars in such payments have been. South Korea began making payments in 1991.

While the cost of maintaining troops overseas is high, it’s not as high as stated. The American troops would be paid and maintained wherever they were, and duty in Europe was always seen as a recruiting tool. As Japan rebuilt itself after World War II, it also became an attractive posting. The tours in Germany and Japan were three years, and you could bring you family. Perhaps the biggest loss to American taxpayers was that American troops overseas spent most of their pay overseas. This cost lots of American jobs, and a vibrant example of that can be seen when American units are sent to Iraq for a year, and the businesses around their U.S. bases suffer economically for as long as the troops are away. Fortunately, the troops in Iraq can’t do much shopping, and spend most of their pay when they get home.

But for most American troops overseas, the main additional cost is travel. The troops are moved economically, usually on chartered aircraft. There’s also the additional expense of shipping ammunition and new equipment. Although in places like Europe and East Asia, a lot of equipment can be purchased locally.

It’s an accounting nightmare calculating what the exact “additional cost” of having troops overseas is. But in the long run, it isn’t as high as the numbers thrown around in the media. Meanwhile, many nations like having U.S. troops in residence. Iraq may even decide that it’s in its best interest to have some American troops permanently stationed there (for protection from their ancient enemy, Iran). In that case, oil rich Iraq will be under some pressure to pick up part of the tab. The way this usually works, the local government pays locals working on American bases, and for supplies bought locally.

The South Koreans still want American troops to stay, to aid in protecting them from North Korean aggression. This was, and still is, the case in Japan, which also has to worry about China and Russia. Until the Cold War ended in 1991, U.S. troops were in West Germany to help keep the Russians out. It’s a form of peacekeeping that American troops overseas don’t get enough credit for. Most of the troops have since been withdrawn from Germany, and most have been pulled out of South Korea. Many American troops are now being moved from Japan to Guam (an American territory).





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