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The Insanity of Exempting Military From Spending Freeze
Jan 26th, 2010 | 46 responses
Glenn Greenwald’s article about the automatic, unquestioned exemption of military spending from inclusion in the spending freeze Barack Obama reportedly plans to announce in the SOTU tomorrow evening has this stunning pie chart:
![[spending.png]](http://1.bp.blogspot.com/_MnYI3_FRbbQ/S17GGwQ1TrI/AAAAAAAACSY/X2bs4rpZpWU/s1600/spending.png)
46 Responses to “The Insanity of Exempting Military From Spending Freeze”
It's enough to break your heart ………….and your wallet.
Ike is rolling in his grave…
Kathy,
You should retitle your post “Insanity of a spending freeze.”
Obama has been a disappointment in several ways, but this particularly piece of political gimmickry is just awful. Even including military spending it's a dumb idea.
IMO, exempting Military Spending (the holy grail) and Homeland Security are purely political ploys. The rabid, radical right would savage all large D democrats from now until the mid-terms as being weak on security.
But by doing that, he is exempting the bulk of the budget. And then, on Rachel last night, she savaged VPOTUS' chief economic advisor, a progressive, as he tried to explain how they were going to cut waste yet promote programs that helped the middle class.
Again all eyes in the White House are on November 2.
I'm mortified by the suggestion. Not only does it show his economic team to be powerless or incompetent, it ties his hands for three years (throwing out any agenda for change).
The GOP may give him 5pts (for a week), Dems will punish him (down at least 25%) and moderates and Independents will flee ( down 50+%) any leader who shows himself to be so reactionary or reckless.
There's no coming back from this so I hope someone stops him!
Now that I look at it more closely, that chart is dishonest to boot. Military spending is about 30% of the budget – the “Cost of past wars,” which they aggregate with current military spending, makes up the rest. That category includes the VA and an estimate of the portion of the national debt from previous wars going all the way back to WWII. Adding in war-related debt and calling it “military spending” while not adding in the debt to the others is statistical trickery.
Seen this chart before and unfortunately for the author, it's BS. First off, it includes a definition of military spending that includes, as an example, NASA and the DSS agents in the state department. Second, the past wars thing is just fun with numbers. In effect, it assigns all debt in any given fiscal year to defense unless the deficit in that year exceeds total defense spending as it does this year.
It's fine to use if you want to make a polemical point, but pretty silly if you want to have a serious discussion.
As to the broader question of whether to exclude the military from a spending freeze, I would say not. Then again, a spending freeze is woefully insufficient to the fiscal challenge we face, particularly coming on the back of a roughly 20% increase in spending (excluding the stimulus) over the past two fiscal years.
It will be interesting to hear Obama's explanation of how a spending freeze, sans military, will improve a recessionary economy and create jobs. Will he also be announcing that he is switching parties?
There is something bordering on paranoia when a people believe they must devote this much of their wealth and treasure to military expenditure. Of course, it couldn't possibly have anything to do with global military expansionism. :~(
I agree, we should actually cut defense spending. Renegotiating contracts, paying only for performance from contractors, and saving money by starting phased withdrawals from Iraq and Afghanistan will save us much money.
However, there are other places to cut the budget. For example, we ought to be going after health-care fraud, and thus cutting the budget there. We can save a lot of money in the War on Poverty by getting rid of debit cards, and starting shipments of actual goods in their place. In the stead of food stamps, we give the poor food, as they did once upon a time. In the stead of clothing vouchers, we give clothing. We can also zero out foreign aid in most cases. We can cut government operating expenses by streamlining the government, decreasing the number of government employees, dismantling superfluous agencies, cutting the pay of elected, appointed, and bureaucratic officials (excepting Article III Judges, since they are immune to pay cuts), among other things.
If those prove insufficient, then the Obama administration should increase taxes, but only then, and only to the extent that they do not cover enough to start paying the principal on the loans we owe.
We can thus begin to fund increases in education, debt service, and infrastructure development. It will hurt in the short-term, but in the long-term, it will be beneficial.
It's fine to cut defense spending, but you need to implement policies to make that happen. One can't stay as engaged as we are in the world, maintain our extensive alliances along with support for two wars and expect cuts of any significance.
Well, as you surely know, Andy, I agree with you and have said so, here, at some length.
In Obama's case, tidbits, I think it has more to do with political opportunism (i.e., getting reelected). Of course, this is the absolute most extreme *wrong* way for the Democrats to go if their goal is getting reelected, but of course that gets us into the particular insanity of the Democratic Party.
That is really what's making my head scratch. Politically, who is going to be pleased by this, even assuming Congress goes along? Overall I think it's quite counterproductive politically. I can only guess that this must be part of his new “populism” strategy.
No one, that's who. But that's the Democratic disease. I thought Obama was not as susceptible to it as other Democrats, but clearly I was wrong.
End the wars in Iraq and Afghanistan, then drastically cut military spending. Cut medicare. Raise the retirement age. Close tax loopholes. End corporate welfare.
THAT would be a good start.
Susceptible? I don't know why he has turned away from the eminently successful strategy he employed to win the nomination and then the Presidency. I think that it is another magnitude beyond susceptible. Perhaps “Timidity” would explain it. He is being too cautious by half which will result in his administration being viewed as a failure. Of course, that is just my opinion.
One can't stay as engaged as we are in the world, maintain our extensive alliances along with support for two wars and expect cuts of any significance.
Exactly. Threatening to cut military spending immediately after escalating a war makes no sense from any perspective.
Back when Obama was deliberating over Afghanistan one of the main concerns was not only if Afghanistan was winnable but also could we afford it. Obama's answer to both questions was “yes”, but that may come back to bite him.
As others have pointed out, it isn't all that possible to cut military spending with all of our current military activities, not to mention all of the bases and troops we have in other countries throughout the world. If we do a bit of scaling back in that regard, I'm onboard. I'm not sure of the wisdom of cutting (or freezing) spending overall, especially coming from Obama, who ridiculed McCain during the campaign for even suggesting it. Perhaps all it is is talk; I mean, $25M no-bid military contracts are still ok, as long as they go to your donors.
“Obama has been a disappointment in several ways, but this particularly piece of political gimmickry is just awful.”
Yes — the cynical, wiser view of this is as follows:
We're being set up for higher taxes and new taxes later. That actually will be the task of the bipartisan commission, giving Obama and the Dems their needed political cover. (Once they “find” the “need” for more taxes, the idea will have the rationalization and veneer of respectability it requires to better get the public to accept it.) This “freeze” pretense of responsibility is Obama's own early-gimmick contribution to the staged performance intended to manipulate public opinion. It is now up to a bipartisan commission to proceed further toward the real goal.
“That is really what's making my head scratch.”
If they believe this is going to cure the public's rejection of Dem overreach, they remain out of touch.
DLS,
We're going to have higher taxes regardless and I think it's high time for the GoP and conservatives to read the writing on the wall. We've been borrowing money to run our government for longer than I've been alive and deficit spending is just another word for future tax increases. It's well past the point where we can grow our way out of the problem.
The problem I have with higher taxes is not paying more – it's the likelihood that our venal Congress will just spend the increased revenues. Well, at some point the unsustainability of our present course will be staring our political leadership and our country in the face and that day will probably come in my lifetime.
Well, the President has surrounded himself with academics and political operatives which is a decision I fear is coming home to roost.
But Andy, the reason we are going to keep borrowing money is because the government is demanding an increasing share of the nation's wealth, without adding any additional benefits.
Take a look at the most recent CBO report. It makes some very charitable assumptions (1% inflation, discretionary spending growing at inflation versus the 8% historical average, no doc fix) and still suggests that the Federal government will be spending 23 or 24 percent of GDP in a stable, full-employment economy.
I agree that higher taxes are part of the solution but, as the poster above said, until people are comfortable that government efficiency has been maximized and all of the hard calls have been made, it will be quite difficult to sustain any support for tax increases.
“The problem I have with higher taxes is not paying more – it's the likelihood that our venal Congress will just spend the increased revenues.”
That's the problem I have with them, too. (I believe you can discern that from what I write on this site.)
The real problem we have is far too much spending (and this is at a time when we should all be recoiling in disgust about the stimulus, and the bank and Detroit, etc., bailouts!), and excessive growth of the federal government (encroaching often into what are properly state and local government affairs when actually not government affairs, but should be private matters), and corresponding unrealistic if not ridiculous expectations by some for this, and more, such growth of government and expenditures.
“Well, at some point the unsustainability of our present course will be staring our political leadership and our country in the face and that day will probably come in my lifetime.”
Yes. Specifically, we'll start seeing effects that can no longer be postponed in about 10 years, I am certain before 20. Just the major entitlements (Social Security and Medicare), the Godzilla monsters of the federal government and budget, will have their unsustainability no longer be ignored. (When the GOP tried to change Social Security, the Dems had the perfect chance to seize the initiative, save the program, and win votes for another generation. But they chose to do nothing, the worst, most stupid opposition and obstructionism in recent history. Now that they're in power, of course they've done nothing to reform and save these programs, as they vowed. Who would believe them, anyway?)
What you will see in about another 10 years is a lot of retirements of incumbent “fixture” politicians in Washington, once these problems can no longer be avoided (once deficits are run in earnest, and trust fund bonds are redeemed, it means higher taxes, more borrowing, redirected revenues, or reductions in benefits). About that time, if our current Dems have their way, we well could have a debt trap and problems with inflation, which was restarted under the guise of “properly managed, ideal inflation as an economic and social lubricant and stimulant.” It no longer will be possible to keep increasing spending and buying cheap votes, no longer will be fun, and they won't want to be there and be held accountable — so they will retire in large numbers. Just wait and see.
Note that the massive spending this past year, at shocking levels (despite a fringe demanding far more such spending) only pushes us closer to an eventual debt trap (and currency devaluation). The major entitlements alone will hurt greatly, but it is augmented and compounded by what the Dems hve been doing.
At least hopefully our economy won't be subject to much additional crippling from eco-socialist “climate” political-movement-based energy policy.
I understand what you're saying about the political reality of tax increases and that's the source for my cynicism and why I think this country will likely teeter on the edge of fiscal disaster before things change.
Let's hope so. Or did you have some libertarian fairy dust you were going to apply to the problem?
We don't need the entire military budget for Afghanistan.
As opposed to what?
So what percentage of the budget would you say is military spending, and do please point to a reference, thank you
JSpencer,
Granted that a balanced budget, or something close, is long term beneficial. And, granted that some semblance of balance will require a coordinated program of significant spending reduction, including entitlement reduction and military budget reduction, combined with some revenue increase.
However, seeking a tax increase during a period of significant unemployment, and continuing recession, is counter-productive. A tax increase at this point in economic time would take disposable income out of the hands of consumers in a consumer driven economy. Likewise it would take needed capital out the hands of business, small business in particular, which is the primary generator of jobs.
The federal government could be more effective by redirecting the remaining stimulus monies into programs that will actually stimulate the economy. That would require assigning those monies to job creation, through private sector contracts, e.g. needed infrastructure projects, and away from block grants to state and local governments designed to save the jobs of government workers, i.e. AFSCME members.
Given the political realities of Washington, redirection of stimulus monies away from AFSCME members and the pet projects of congressional leaders is unlikely. But, at the very least, we should avoid counter-productive measures like tax increases until the economy is in real recovery. And, even then tax increases should be minor and phased in to minimize economic dislocation, and in combination with spending reduction, also phased in to minimize economic dislocation.
It would be nice if he had more people with real experience outside Washington. I understand that any administration is going to have political people and academics, but it would be nice if he was also getting advice from someone who is interested in more than the political immediacy or economic theory. I mean, you and I agree on this freeze and we both think it's a dumb idea. It's obviously something his advisers came up with and that just tells me he needs some better advisers. How else would you explain it?
I'd explain it by saying the advice came from his political advisors who were telling him that he needed to do something about the deficit and soon…
and his economic advisors who were telling him he couldn't substantially reduce spending or he would risk the economy so presto we have spending restraint that actually doesn't cost very much in the short term.
I think the people complaining about contracting effects of the policy are internally inconsistent. Krugman and others like him complain that this policy will hurt the economy and simultaneously argue that the $787 billion stimulus wasn't really enough to help. So -$20 billion can crash the economy but $787 billion isn't enough to really help it?
I agree in part with your general assessment, but also believe a tax structure more along the lines of what existed in the 40's, 50's, and 60's should have never been abandon. It worked fine then, the country was in great shape, people were certainly able to get rich, but the middle class (which is obvioiusly stretched to the limit now) was able to survive in relative comfort. I think the GI bill helped too, but mainly because it was used in such huge numbers. The greed component of society has taken it's toll in many ways, the acceptance of credit as a lifestyle, moving corporations (and profits) overseas, reduced regulatory functions, etc. This stuff is all interconnected and there is no magic bullet – as you suggest, this will need to be tackled on many fronts if we are going to get through it. The usual polarization and obstruction of Washington will of course only exacerbate the problem, as will a poorly informed and equally divisive electorate.
We don't need the entire military budget for Afghanistan.
Gee no kidding, thanks for the insight.
Maybe everybody is looking in the wrong place for the cause of this problem:
From today's AP wire service-
“The Senate vote to kill the deficit task force came just hours after the nonpartisan Congressional Budget Office predicted a $1.35 trillion deficit for this year as the economy continues to slowly recover from the recession.
“Yet another indication that Congress is more concerned with the next election than the next generation,” said Sen. Judd Gregg, R-N.H., a sponsor of the plan.”
It amazes me that everybody sees this as some kind of political problem. If the idea of a commission to investigate ways of reducing the deficit is too distasteful to 47 Senators, maybe that's where people should look. Why, by the way, is saving money a partisan issue that requires 60 votes?
As to ways to reduce Defense Spending? That's relatively easy.
“It's not easy to assess the size or exact value of our empire of bases. Official records on these subjects are misleading, although instructive. According to the Defense Department's annual “Base Structure Report” for fiscal year 2003, which itemizes foreign and domestic U.S. military real estate, the Pentagon currently owns or rents 702 overseas bases in about 130 countries and HAS another 6,000 bases in the United States and its territories.”
Is there anybody here who believes that we must have all of these bases to maintain security?
If it were me, I'd just order the military to give back 25% each year until the depression, I mean discretionary spending freeze was over. Then that would be used to pay back the national debt and a tax rebate for father time.
“I'd just order the military to give back 25% each year”
Even one year would be greedy (the money would be misspent on other things), but that's what Barney Frank has sought.
http://www.house.gov/frank/articles/…/03-02-09-cut-m...
http://www.barneyfrank.net/node/228
etc.
“Let's hope so. Or did you have some libertarian fairy dust you were going to apply to the problem?”
“Let's hope so” indicates who is in need of assistance.
“We're going to have higher taxes regardless”
For years I've wondered which it will be, the retail sales tax or the VAT — while not abolishing the income tax. (In fact, a progressive wealth tax is sought by the extreme Left, in addition to a progressive income tax.) Also ready to raise vast new revenues is a tax on motor vehicle fuels and other transportation fuels (aviation fuel, Diesel for trucks, busses, and trains), which might be levied as part of a “carbon tax” scheme to satisfy a psyence-Lysenkoist enviro-socialist energy agenda.
Here is what bothers me more:
http://www.fiscalaccountability.org/index.php?c…
What I want to know is when are we going to start calling it “Bush's Depression”? Yes, in fairness there is plenty of blame to go around, but the truth is that his administration was not doing the job they were entrusted to do. Instead they were busy throwing young Americans into a meat grinder in a bogus war. They certainly had a better opportunity to address the tanking economy than Obama does. It's simple, the earlier you deal with a problem, the better your odds of success. Negligence – with a capital N.
“The earlier you deal with a problem, the better your odds of success. “
Tell that to the Dems who refuse to reform and rescue Social Security and Medicare before the trust fund bonds have to begin being redeemed.
Well, this is about military spending, but it's true, SS and medicare need to be faced – a problem that's been kicked down the road since well before Obama. We sure dodged a bullet when the Bush plan for SS didn't get off the ground though.
“We sure dodged a bullet when the Bush plan for SS didn't get off the ground though eh!”
a) “Try to focus[,] little fella. This is about military spending.”
b) True — the Bush plan was a bad one, and of course one reaction people had to the economic slump and the fall in stock prices was similar to how some critics in 1981 of Israel's attack on the Iraqi nuclear reactor felt after the invasion of Kuwait and threat to take the Saudi territory: ** WHEW **. (There's also the other criticism of the plan, that it would remain a federal government plan, and eventually would lead to making the federal government into the nation's and probably the world's largest institutional investor.)
Note that an important event related to that, and even more important for what should have been done and what wasn't, was that the Dems (who _own_ that program) could have saved Social Security then, and should have — they would have acted before the deficits begin, before 2020 (the point of failure and the need to raise new revenue or take it from elsewhere, in order to start redeeming trust fund bonds).
There was nothing stopping them from reforming and saving Social Security and Medicare this past year (especially when they were fully in power), and they should have tried, and should have reformed Medicare before extending the federal government's scope in this area, not to mention before taking money out of Medicare. Their reckless acts and poor decision making as well as misbehavior are why they're in such trouble now.
c) There is no reason to be obscessed with reducing military spending in particular, or treating it as a lefty demon in any other way (or merely seeing it as something not only hated, but a fat target for plunder, to raid and spend the money on other things instead).
Interesting item I found:
http://alexconant.com/?p=1599
So this spending “freeze” still has him spending more than Bush did in on “non-defense” discretionary spending. Of course he will dress up this as fiscal disipline but the lipstick is going on a pig.
“So this spending 'freeze' still has him spending more than Bush did in on 'non-defense' discretionary spending. Of course he will dress up this as fiscal disipline but the lipstick is going on a pig.”
Fiscal discipline will be claimed after possibly admitting that some things may have been clumsy or rushed (attempting to bury the C-SPAN “transparency” problem — the Herd will claim it's Settled), and of course it will have been for the right reasons, “to prevent another Great Depression” [snicker].
Hopefully he won't be so desperate or disgusting, or assuming too many of us are so stupid we'd find it acceptable, as to blame Bush for this. (That was one of the most stupid decisions he made, during the interview with Diane Sawyer. It was truly stooping low. To do it in tonight's speech would be lower, still.)