America's Broke Soldiery

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The problem has become self-reinforcing.  Because military service people with bad credit ratings cannot get security clearances, the number of combat-ready soldiers is reduced, placing an added burden on the forces already doing the fighting.  It is no coincidence that the current program began the same year as the U.S. invasion of Iraq.  With the first major combat effort since the end of the Cold War, the Defense Department became concerned that active duty soldiers with money troubles would be distracted from their official tasks.  Hence, the program’s unofficial motto that, “Financial readiness equals mission readiness.”  
While each Roadshow event is slightly different, the basic structure is the same.  Participants in the Financial Readiness Challenge, as the event is sometimes called, circulate through an exhibition hall, where representatives from government and non-profit agencies, as well as personal and financial planners, have set up booths with general information on personal debt, credit ratings, purchasing a home, financing college, and planning for retirement.  

In addition to the booths, there are presentations.  At the top of the bill are the keynote speakers, financial advice stars hailing from the world of cable television and talk radio.  As with their advice in general, their advice to our men and women in uniform ranges from the useful, if also pretty basic, to the seriously problematic and blatantly absurd.  It is indeed good to know that unpaid credit card debt is dangerous and that your credit score matters.  It is also good to know about variable and fixed interest rates for mortgages and other big expenses.  The fact that many people, both in and outside of the military, enjoy sitting through hour-long repetitions of these mantras, seems to confirm the industry’s claim that when it comes to financial literacy, we are ignorant.  It also suggests a certain need to remind ourselves of the financial principles we do know.  Like Saturday night sinners, we return to hear the sermon each Sunday in the hopes that it will make us virtuous.   

Larry Winget, best-selling author and host of A&E’s “The Big Spender,” has been the keynote speaker at various Road Show events.  Fit and in his fifties, Winget is bald, with a goatee, and has a hip, casual style.  At the Tinker Air Force base in Oklahoma City in December 2008, he wore jeans, a black shirt with yellow embroidery on the chest, and sunglasses atop his head.  Through most of his presentation, he stood on the stage with a comfortable slouch, as though he were at a bar with friends.  Every now and then, he would saunter over to his easel to illustrate his financial theology.  “We grew up hearing that the world is full of haves and have nots.  That is a lie,” he said to the audience, as he picked up his marker.  “The world is full of the wills and the will nots,” circling these words on the paper with vehemence.  “The ones who will end up with more.”     
This proclamation epitomizes the Emersonian quality of the financial self-help discourse, which typically equates financial well-being with individual agency and responsibility.  Suzie Orman, the high priestess of this discourse, gave the keynote address at the Walter Reade Roadshow last September.  Like Winget, she told the troops that their financial destiny is in their own hands.  “Every single day you decide to waste, every single day you decide you don’t want to get involved with your money … you are changing the outcome of your financial future,” she warned.

There is a striking overlap between the belief in individual agency associated with the financial self-help discourse and the belief in national agency associated with the U.S. invasion of Iraq.  Consciously or unconsciously, Orman tapped into the lingo of neoconservative foreign policy when she framed her advice to the soldiers as a “recipe” for “financial freedom.”  If this parallel reassures some audience members who have understood their personal sacrifices for the nation in terms of spreading freedom in the world, it should raise the eyebrows of those who have come to question America’s ability to will the world into being anything.  The problem with both the ideologies of extreme personal and extreme national agency is that they lack context.  There is no sense of the larger systems in which military service people and the American nation exist.
Considered in a more systemic context, many of the average soldier’s problems stem from forces that have much less to do with individual will than with a lack of financial regulation.  Payday and other predatory lenders have historically preyed upon the military, setting up camp in military towns, marketing toward military enlistees, and even soliciting on military bases.  Recently, Congress has made efforts to combat this problem through legislation.  The Military Lending Act of 2007 forces lenders to be more transparent about the terms of their loans to military service members and their families and caps the interest rates of these loans at 36 percent.  In addition, the Department of Defense has banned several individual loan agents and some loan companies from soliciting on military bases.

The personal finance representatives who participate in the Roadshow are ostensibly part of the solution, educating the military about the risks involved with predatory lenders.  This is sound advice.  Still, it is difficult not to see some comparisons between those who caused the problem and those who are helping to solve it.  Like predatory lenders, the personal finance representatives who participate in the Financial Roadshows are also targeting the military, and they also stand to profit from doing so.  Unlike the payday lenders, who sneak on the scene insidiously, the personal finance industry has been invited by the Department of Defense.  This is the kind of invitation private security firms dream about.

None of the solutions in the Financial Readiness Challenge can overcome what is probably the most fundamental factor in military debt—and that is extremely low wages.  In 2007, a private entering the army received a base pay of $1,347 for a total of $16,164 a year.  Recent increases have brought that figure up.  In 2010, a private entering the army will receive a base pay of  $1,447.20 a month, for a total of $17, 366.  Even this 7% increase, however, does not bring the new military recruit with two children above the poverty line.

While decent pay stands at the end of a long career in the military, the rewards are slow to come.  A private needs to be promoted five ranks and generally serve for more than 2 years before she can break the $2,000 per month threshold and 4 years before she can earn $3,000 per month.  It’s hard to see how young enlistees could avoid borrowing in these early lean years, in the hope that they will be able to pay off some of their debts as their wages increase in the years ahead.  In contrast to officers, military enlistees have never been nor do they expect to be in the upper income brackets of the nation. 
Still, even as middle-incomes have stagnated in recent decades, military pay has failed to keep up with them.  According to the Military Officers Association of America, for the period 1972-2010, there is a minus 2.4 percent gap between military and private sector wages.  
In the wake of the economic bust, many financial commentators have been espousing the supposedly forgotten value of saving.  In this vein, Winget advised the men and women at Tinker Air Force base to “figure out a way to put away some money.  You need a bare minimum, and I mean a bare minimum,” he insisted, “of two months’ worth of expenses put away.”  Winget doesn’t say quite how to do this on less than twenty thousand a year, but some other Roadshow presenters do have some creative advice.  One of these is Clark Howard, the host of various radio and cable TV shows on personal finance and also a member of the Georgia State Defense Force, which he joined in 2001. 
Howard prides himself on being cheap.  Sporting his camouflage at the Roadshow event in Fort Benning, Georgia in December 2009, Clark let the audience in on one of his money-saving secrets.  If you dry your razor after you use it, you only go through two razor blades a year.  So, if you want to get “Clark Smart,” you’ll buy two 35-pack of razors on clearance, which will last you well into your golden years.  Along similar lines, the Facebook page associated with the Financial Readiness Campaign contains updates on how to clip coupons and save on everyday items.  

Part of the reason these and other austerity measures give people solace is that they take the focus off the bigger picture, which we have less power to control, and place it on the little things, which we can control.  To some degree, this effect explains the success of the finance guru industry as a whole.  With their emphasis on personal responsibility and fiscal austerity, the financial gurus give us the illusion of control over our economic standing.  For better or worse, they take our minds off the depressing reality that good jobs with benefits and security, jobs that wouldn’t require us to clip coupons, are getting harder and harder to come by.   

Telling soldiers to dry their razors and clip coupons is especially problematic in the context of the national debt and the military’s contribution to it.  Currently, the federal debt stands at over twelve billion dollars and counting.  Still, the U.S. spends more than any other nation on its military, a superlative hardly threatened by the financial crisis.  The Defense Department’s base budget has gone up every year in the last 4 years.  In 2010, the federal government has allocated $663.7 billion for Defense, up 4% from 2009. 
Compared to other expenditures, the amount spent on military personnel is small.  In 2008, when the Bush administration had a defense budget of $632.7 billion, it allocated just $137 billion, or 21.6 percent, to military salaries.  Even with the Obama administration’s significance increase—the Defense Department has budgeted $177.5 billion for military salaries in 2010—personnel salaries will take up just 27% of the Defense budget.  The overwhelming bulk of Defense Department spending goes not to military personnel, but to research and development, military equipment and technology, and of course, arms.

As Suzie Orman told the troops at Walter Reade, “You can’t talk about having money until you talk about what you do have, and what you do have is debt.”  Given its financial difficulties, perhaps the Defense Department should take some advice from its own program.  Secretary Gates, get out your scissors.  You’ve got some coupons to clip.  Maybe that’ll get your mind off of the systemic problems in Afghanistan and Iraq for awhile.     

[i] Linsay Rousseau Burnett, “The Military’s War on Debt,” Frontline,  Nov. 24, 2009,

[ii] Julian Barnes, interview by Paul Barry, “Home and Family Finance,” Radio America, May 24, 2009,

[iii] Kate Kashman, “Reviewing the Financial Roadshow,” The Paycheck  Chronicles, Feb. 19, 2009,
[iv] Video, Nov. 10, 2008, NewsOK,; Andrew Knitter, “Money woes hurt military mission,” NewsOK, Nov. 11, 2008,

[v] Samantha Quigley, American Forces Press Service, Sept. 30, 2009,

[vi] Linsay Rousseau Burnett, “The Military’s War on Debt,” Frontline, 
Nov. 24, 2009,;
“Military Debt Protection Could Hold Lessons for Congress, Consumers,” PBS NewsHour, Nov. 24, 2009,

[vii] Center for Responsible Lending, “Military Lending Act to Take Effect Oct. 1,” Press Release, Sept. 27, 2007,

[viii] “Personal Commercial Solicitation of Military Personnel,” Report of the Inspector General, U.S. Department of Defense,

[ix] “2007 Basic Monthly Pay,” chart, Demographics 2007: Profile of the Military Community, Department of Defense,

[x] “2010 Basic Pay: 20 Years of Service and Below,” chart,

[xi] The 2009 Health and Human Services Poverty Guidelines,
In 2009, the federal poverty line for a family of four was $22,050.

[xii] “2010 Basic Pay: 20 Years of Service and Below,” chart,

[xiii] “Military Pay Raise Gap,” Military Officers Association of America,

[xiv] Video, Nov. 10, 2008, NewsOK,
; Andrew Knitter, :Money woes hurt military mission,” NewsOK, Nov. 11, 

[xv] “Saving Some Bucks and Handling Your Finances,” HLN, Dec. 3, 2009,

[xvi] Military Saves, Facebook page,

[xvii] “Historical Debt Outstanding, Annual, 2000-2009,” U.S. Department of the Treasury Bureau of the Public Debt,
[xviii] “Department of Defense Topline: FY2001-2010,” Summary Chart, FY 2010, Budget Briefing, Department of Defense,

[xix] Department of Defense, Press Release, Fiscal 2010 Budget Proposal,

[xx] Fiscal 2008 Department of Defense Budget, Press Release, Feb. 5, 2007,

[xxi] Overview of the DOD Fiscal 2010 Budget Proposal, Department of Defense,

[xxii] Samantha Quigley, American Forces Press Service, Sept. 30, 
2009,  http://www.militaryavenue.

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