"For the Obama administration to exempt defense spending from its kinda-sorta-spending-freeze is a position that makes no sense from a policy perspective. None at all. From a political perspective, it only begins to make sense because a brain-dead media would amplify the braying ignorance blasted from a GOP congressional megaphone about Defense Spending Cuts OMG. And even then it doesn’t make sense. A holdover Republican Defense Secretary is now the biggest advocate of an even slightly sensible defense budget in the Obama administration."I agree completely with the point that making the DOD exempt from budgetary consideration is insane. Whether or not Defense spending is excessive is another matter - I suspect that it is but don't know enough of the programmatic details to make a rational assessment.
Glenn Greenwald has more:
"But the freeze is more notable for what it excludes than what it includes. For now, it does not include the largest domestic spending programs: Medicare, Medicaid and Social Security. And all "security-related programs" are also exempted from the freeze, which means it does not apply to military spending, the intelligence budget, the Surveillance State, or foreign military aid."The inclusion of the Big Three domestic social welfare programs makes a mockery of this "freeze". This reeks to me of pure political kabuki, the thing that the Obamites were supposed to "change".
Horsefeathers.
(Update 1/26: Andy makes a good point, and the previous pie chart lumped a lot of additional, perhaps defense-related but still technically not pure DOD spending together. This is from the CBO, and breaks out the DOD as a stand alone portion of the budget. It is still, you note, after Social Security, the largest individual slice. And, realistically, the VA, Homeland Security, and the "off-budget" funding for things like the NSA should be included in the DOD slice. It's not THE biggest slice...but it's a hell of a big slice.)
But on the DOD question - this is called "MilPub", after all - this reeks of Democrats running in fear of Republicans demagoging the issue of defense spending.
There is no question in my mind that the GOP will not ever make sane decisions about DOD funding - they all want the money and they all want it all (if they could zero the budgets for the Departments of Energy, Education, HHS and EPA and throw it all at another carrier air group they would, IMO). If the Dems have no stomach for it, is there any way short of Malthusian fiscal collapse to reform the defense budget and acquisition process?
Have at it.
FDChief,
ReplyDeleteLook at the diplomacy cut of the pie.
Really cool.
jim
Jim; Yeah, kinda like buying a $100 hammer and no nails, huh?
ReplyDeleteAnd a whopping 2.5% for ALL science, energy (gonna buy a whole lot of post-internal-combustion technology with that slice of pie, eh?) and environment...
Does anybody ever really THINK about these priorities? WTF?
"I agree completely with the point that making the DOD exempt from budgetary consideration is insane."
ReplyDeleteSee, I would quibble that it is far from insane. It's not logical, but it is sane behavior of politicians intent on retaining their positions of power.
McCoy: Life and death are seldom logical.
Spock: But attaining a desired goal always is.
(The Galileo Seven)
J: But...but the problem here is that if the polity collapses under the weight of unconsidered expense the pols will lose their rice bowl along with the rest of us. I'm sure that the aristos of 16th Century Spain felt that fighting the Dutch Prods was a sure-fire way to job security...until the moment the treasury of the Escurial came up empty and the position of Minister of War became a hollow one, with no more money to pay the tercios and a ruined economy at home to shattered to restore Spanish imperial greatness.
ReplyDeleteGreat empires remain great by allocating their resources wisely. When the trans-Rhine colonia become to costly to maintain, we pull the legions back to the Gaullish side, let the barbarians do what the barbarians do, and maintain our empire within its smaller borders for another three hundred years or so.
It seems obvious to me that no organism can maintain itself at maximum size and speed for an infinite time. It either regulates itself or finds itself regulated by outside factors...which are probably less merciful and certainly more random.
Wow, that pie chart is a nice piece of propaganda. To begin, "military spending" includes everything that's tangentially related to the military, like the NASA budget and the DSS agents in the state department. Additionally, the "past wars" thing is just pulling numbers out of one's ass. While it includes the entire VA budget, which seems reasonable, it also assigns all debt in any given fiscal year to defense unless the deficit in that year exceeds total defense spending. In essence it assumes the entire deficit is because of defense spending.
ReplyDeleteSo I suppose it works to make a polemical point, but that's about it.
As far as President Obama's plan to freeze portions of the budget, I have to say I'm very disappointed. I'm disappointed for two reasons: For one, it's politically stupid which only demonstrates the President is disconnected from the concerns of the electorate. Secondly, it is substantively flawed. Brad Delong says it better than I can:
As one deficit-hawk journalist of my acquaintance says this evening, this is a perfect example of fundamental unseriousness: rather than make proposals that will actually tackle the long-term deficit–either through future tax increases triggered by excessive deficits or through future entitlement spending caps triggered by excessive deficits–come up with a proposal that does short-term harm to the economy without tackling the deficit in any serious and significant way.
Dumb politically and dump substantively - that's about all I can say.
Andy: Frankly, anyone who is worried about the deficit right now, in the worst economic slump since 1945, is an idiot, and should be dismissed as such. The only reasons that the deficit is a problem at all is that certain other idiots decided to run up deficits by increasing spending and cutting taxes (hmmm...wonder who that was..?). Since 1932, governments typically go into deficit to offset collapses in private spending.
ReplyDeleteHint: this is one of those times.
As for the size of the blue slice, since much of the peripheral spending in places like NASA is FOR defense (WTF is NASA doing other than shipping MREs to the worthless space station? Mmmm...could it be launching satellites for DOD?) and defense-ancillary reasons (like the DSS at DOS), why SHOULDN'T it be considered part of the defense pie? Pretty much ALL of our intel services are defense-driven, as is much of our commercial and industrial expenditures.
We spend 4% of our GDP on defense, in a time when we have no real peer foe. The average for the rest of the world is half of that.
But, again, my point was NOT to argue that we spend too much on defense. I have no way to really know that, and don't presume to be willing to spend the time and effort it would take to become knowledgable.
My point is that the DOD budget is like some sort of Article of Faith. Despite what the blogosphere and we say here, I hear no "legitimate" sources inside the Beltway, none of the national news organs, asking "WTF are we spending so goddam much on missile defense/FCS/heavy platforms/aircraft carriers/submarines...etc, etc..." So long as one raggedy-ass AQ wannabe published his letter to the editor talking about how he wants to nuke the SuperBowl, we seem content to give this whole defense budget a complete pass...other than competing to see who throws MORE money at the military.
Andy: Your point on the original graph is well made, and I have replaced it with a more evenhanded graphic.
ReplyDeleteI will add, tho, that if you throw in the ancillary budget items - State protection, NASA military activities and especially the black-bag NSA/CIA ("other off-budget") allocations - you get the biggest single pie slice.
Maybe it SHOULD be the biggest. Or maybe not. But to not even discuss it? To put it out of bounds, along with the entitlement programs? That's not "dumb politically and dumb substantively"...
@FDChief:
ReplyDelete"Frankly, anyone who is worried about the deficit right now, in the worst economic slump since 1945, is an idiot, and should be dismissed as such."
I disagree. It was almost economic science consensus before 2007 that stimulus packages are a poor idea. The reason lies in a handful variables among thousands of variables in modern macroeconomic full national economy models and is far away from what normal people can argue about usefully.
There was a difficult to explain rush in 2008/2009 when suddenly the stimulus was re-invented as the proposed savior of us all. That's probably just a hype, and millions fell prey to it.
The pro-stimulus faction had strong advantages:
* People need to do something if the shit hits the fan. They cannot stay calm. They cannot accept their inability to solve the problem, even if they're utterly powerless. Some solution needed to be found, no matter real or illusion.
* The aforementioned variable is quite elusive and econometric analysis yielded different values in different studies, preventing a general consensus on the value. Few studies yielded values in favour of the stimulus, though.
* A stimulus can be expected to benefit certain partial interests more than it hurts them - this generated a lobby for the stimulus while there was no equally interested counter-lobby.
* Most politicians and almost all media talking heads have no clue about economic policy.
In the end, spending more likely just means to cushion the crisis at the price of an even worse situation in the long term.
My proposal was move 2011-2013 expenditures into 2008-09 if possible in order to have some long-term debt-neutral stimulus as a compromise.
Keep in min that the U.S. and UK did not publicly grasp the root of the crisis yet. They discuss the symptoms of symptoms of symptoms. Both national economies are extremely unsustainable and both nations think they're richer than they are.
This living beyond their means is the core problem, and an even deeper dive into deficit culture and "deficit spending wills ave us" means to simply accelerate towards the next crash. And that one could strip the "developed nation" status.
Interestingly, the problems are very different in different countries.
Germany has the opposite problem of the UK problem and is actually not much linked with the U.S. (most of the German trade is intra-EU trade).
Sven Ortmann
(= just a guy with a university degree on economic science with study focus on economic policy, fiscal policy, growth & wealth distribution theory)
Chief,
ReplyDeleteI wouldn't have a problem with the chart if it compared apples to apples. Instead it was purposely designed to skew toward military spending. For example, the VA and DoD spend a lot of money on health care, yet that is included as "military spending" and not "health spending." In reality, it's both and aggregating it all to one slice of the pie does not present an accurate picture. Same with science spending, and education.
I agree with Sven that our primary long-term worry is our structural deficits and he's right that we think we're richer than we really are. At the same time, we have immediate problems that need to be addressed and while I don't think the Keynsian multiplier is nearly as powerful as proponents claim, I do think short-term government deficit spending can help.
But the issue is that temporary spending could easily become institutionalized and become long-term spending. Money should also be spent responsibly on things that will actually stimulate the economy towards recovery. Unfortunately, the so-called "stimulus package" was extremely flawed since it back-loaded much of the spending (I think less than 1/2 has been spent so far) and most of it was not really stimulus but was intended to prop-up state and local governments. Whatever the merits of borrowing federal money to temporarily relieve the fiscal problems of a few states, that kind of spending is not stimulus and spending money on local government does very little if anything to boost private-sector employment.
(cont.)
And private sector money was mostly wasted. First was buying car companies and boosting auto production in an environment where there is already tremendous excess production capacity both in the US and worldwide. Future job growth simply isn't going to come from the auto industry, so stimulus money would be better spent in areas that might actually see future growth and job creation.
ReplyDeleteSecond is all the money given to the financial industry, yet many problems in that industry remain. The Administration is trying to have it both ways by continuing to allow institutions that are "too big to fail" while at the same time excoriating the "fat cats" and attempting to dictate compensation policies. If the government would simply break up these systemically risky institutions and make it clear that in the future Uncle Sam won't bail them out, then the executive compensation problem will solve itself.
And finally there are the so-called "shovel ready" projects and it now appears most of those weren't shovel ready at all and regardless they've benefited a small number of large, specialist infrastructure contractors. This isn't the 1930's where infrastructure is build with thousands of men with shovels and picks.
And, to add insult to injury, the Administration has spent the last several months defending this non-stimulus stimulus package and coming up with completely bogus numbers of "jobs saved or created." They can't even get their numbers straight - on three different Sunday newsies this past weekend, administration officials gave three completely different numbers on jobs "saved or created" by the stimulus! I guess they have no idea what the effects of the stimulus are either.
The administration seems completely tone-deaf to the fact that the stimulus didn't work and no one, except maybe the partisans, wants to hear about how great the stimulus is when unemployment is well over 10%, particularly when the Administration claimed it wouldn't rise above 8%. People who've spent months looking for a job or are at risk of unemployment don't want to hear the administration's political operatives defending a clearly failed policy and continuing to blame Bush. That's why you see such disappointment among moderates and independents and why Obama's popularity no longer extends much pass the Democratic base.
I'm one of those independents. I voted for Obama and I thought he had real political talent and the kind of moderate temperament that's usually absent in our beltway leadership. I didn't agree with all his policies (I didn't like the health-care bill for example), but I appreciated and liked the general direction and vision he campaigned on. Instead, it seems to me he's lost his way is and still in campaign mode. He got too wrapped-up in healthcare to the detriment of jobs which is really what I think most people are mad about. He also appears to be getting a lot of bad advice from his staff - this idea of freezing part of the budget is the kind of proposal that comes from a political idea fairy who's spent too much time looking at polls and worrying about Obama's approval rating. I thought Obama was smart enough to see through that kind of bullshit, but I guess not.
Oh, one more thing. I don't have any problems reducing the defense budget, in fact I think it should be reduced. But to get real reductions you have to put the cart before the horse. You've got to look at priorities, examine costs and benefits and that's going to mean changing our foreign policy, rearranging our alliance commitments and changing strategy in Afghanistan. IOW, you adopt policies that enable a smaller military and then you adjust the budget accordingly.
ReplyDeleteAndy:
ReplyDeleteSome of the stimulus projects, such as transportation, push money to the states with relatively few strings attached. Agreed, transportation projects are done by specialized contractors that have nothing to do with, say, housing construction. However, the funds can be put right to work.
Civil works projects need to follow matching requirements, i.e.; 75% federal, 25% state. I'm heavy into a local government board, as a volunteer, that corresponds to a federal project. The state could handle the regular matching funds but is overwhelmed by the spike caused by stimulus funding. Like many states, it is having its own severe budget problems and is trying to see where it can cut.
I'm used to trooping to DC to support the annual appropriation and, with my congressman, have met with an E ring civilian appointee and OMB to keep the funds flowing. I could always count on the state to come through. Now, I find myself dealing with the state administration and legislators.
BTW - I never dreamed that I would be in this role although I was almost choking when MSR wrote about his role in congressional liaison. I see it from a different perspective, including hiring a lobbying firm.
Thanks for the perspective, BigBird. I should hasten to add there is undoubtedly good spending in the stimulus, but I just think it was too few, too far between and too late to have much effect.
ReplyDeleteSven: Not sure which economists you're listening to on Keynesian stimulus - Andy's guy Hayek comes to mind. It doesn't seem too difficult to figure that if private spending fails than public spending has to step in or widespread economic failure and unemployment results. The reason "people cannot remain calm" is because when your job disappears and your house is foreclosed then, no, you can't stay fucking calm. It's all well and good to prose on about economic theory. If fear iteslf becomes a factor, all the economic wisdom in the world is useless.
ReplyDeleteYes, structural deficits are a problem. But not in the way the "deficit hawks" want people to believe. These hawks were cooing doves between 2000 and 2008, when the administration then in power was slashing taxes while spending like a drunken sailor in a liberty port. The Bush deficits were ridiculous, and yet you seldom heard a discouraging word about how we had guns and butter and no taxes to pay for them.
Now that the bubble has burst and a Democrat is in power the hawks come slashing out to worry the guy about his "deficit problem".
But, again, the point of this post was simply to point out the economic and political onanism of "freezing" spending and exempting the defense budget as well as the Big Three entitlement programs.
Andy: I didn't have any hopes at all for Obama; I just knew that McSame was...well, the same as the precdeing eight years. The Obama Administration's behavior has made it fairly clear to me, though, that the Powers That Be are making bank that if they don't mention the problems Sven brings up.
I don't think it's so much campaigning. I think it's because - as I suggest in the post that follows this one - that the ground under the U.S. political system has fundamentally shifted. The real genius of the Reagan Revolution was to put the discussion of economic and political reality out of bounds. "Deficits don't matter" said Dick Cheney, remember? Even if Obama really wanted to make significant changes in the way things work, the people who helped shift that ground - the financial sector geniuses, the big interest groups and powerful lobbies, the major corporations, the media, not to mention the political class itself - is too entrenched to shift.
I honestly think that it will take a real economic or political cataclysm to shift the U.S. out of its current - and probably unsustainable - channel.
"Sven: Not sure which economists you're listening to on Keynesian stimulus - Andy's guy Hayek comes to mind. It doesn't seem too difficult to figure that if private spending fails than public spending has to step in or widespread economic failure and unemployment results."
ReplyDeleteOK, and now let's leave the fairy land and look at the other side of the coin.
Where is that money coming from?
- taxation: Money is being taken away and then spent differently. Very little difference. Oh, add 15% unproductive administration and evasion cost for taxation.
- domestic debt: Money is being taken from domestic savings and then spent differently. Again, very little difference.
- foreign debt: Foreign money is being taken and spent domestically. Now this was obviously no way to go because the crisis was global. It didn't happen, too: The trade balance deficit halved during the crisis.
- inventing more money (Fed): Great, good luck with the later inflation, it's a kind of "socialization" of savings. This further damages the currency, the standing, the political culture. It works only as long as surprise lasts (that may turn out to be no more than 2 years).
Some economists declared that these "little difference"-defining variable would look powerful this time because both consumers and investors were cautious and were rather ready to slow down money circulation than to spend unwisely. That's a gap that offers a chance for a stimulus with newly invented money because more money at slower circulation = no inflation (at first).
Yet even that is a myopic tunnel vision opinion because the crash of consumption was only about half or less of the necessary correction of consumption levels for a sustainable economic situation.
In other words: The stimulus is like an anti-fever drug that suppresses the natural reaction to a problem without solving the problem.
They attempted to cure the symptom and failed even in doing that.
The crash of consumption is OK (actually too small).
A sustainable policy would
(1) generate a nation-wide understanding of the economic structural problem and dispel the one-sided "consumption drives our economy" myth in favour of a clear message on the importance of savings & investment
(2) increase savings rate
(3) decrease consumption to a sustainable level
(4) modify distribution of income because the poor must not decrease consumption by much
(5) have balanced budgets on state and federal level asap
(6) improve access to higher education, improve the chances of pupils to qualify for higher education in school
(7) do not allow rationalization of jobs in purely domestic sectors such as retail. There won't be enough low skill industry jobs.
(8) Don't neglect the support of sectors that are likely to be competitive in the future (favour biochemistry over automotive sectors, for example)
Oh yeah, and don't shame yourself all the time by having a health policy that provides millions of your citizens with inferior health services than Cuba provides to its citizens (a.k.a. "workers").
It would also help to raise expectations in regard to product quality (consumer protection). The average U.S. butcher would cause a national scandal and go to jail for years in Germany, for example.
Sven's got a good set of suggestions, I don't think they, by themselves, will be enough to drag us out of this mess but you could do a lot worse than to follow them.
ReplyDeleteSome notes on his suggestions:
1) Very valuable but incredibly hard. The problems are closely linked to the things that made us great and many people in the US have a strong will not to believe them. Check out FM's links to the Tea Party movement to get a feel for how middle America is beginning to respond.
2) After making good progress early last year the savings rate is beginning to slip again. I'm not sure if it is a result of the high unemployment rate or if people are getting foolish with their money again. Probably both.
3) This is happening already and the retailers are running very scared.
4) My response is similar to answer #1. One of the things that many Americans believe made America great is that theoretically there is no limit to how far a talented individual can climb. The corollary is that there is no limit to how far a person can fall.
Currently most Americans are all too willing to let millions fall into deepest poverty so a few can succeed beyond their wildest dreams. It's kind of like winning the lottery or American Idol.
5) The states have to balance their budgets, at least on paper, and most are in major trouble. California, Illinois, and New Jersey are in critical trouble.
I'm very hesitant to tie the Federal hands because the system needs a safety valve for moments of national crisis. But I recognize your point that the current incarnation of the safety valve has become the norm rather than the exception and it is rapidly destroying us.
6) No argument with your theory but implementation in the US will be difficult, if not impossible, under the current system. Also we need a lot of entrepeneurial types to employ all those newly educated people.
The primary business model in the US for the last few years is for established corporations to ruthlessly cut jobs and ruthlessly seek to destroy start-ups that might compete with them. This is incredibly self-destructive in the long-run but the corporate executives are running scared and scared people are the most dangerous of all.
7) See points 4 and 6.
8) This is also happening but very quietly and I'm not sure if it is happening enough to make us competitive when the dust from the current mess settles. Time will tell.
Chief,
ReplyDeleteWhere are you getting the idea that Hayek is my guy? All I did was link to a cool video with Hayek and Keynes rapping at each other.
Sven,
ReplyDelete- taxation: Money is being taken away and then spent differently. Very little difference. Oh, add 15% unproductive administration and evasion cost for taxation.
Money is not being take from current taxation (ie. higher taxes) but from future taxation in the form of borrowed money.
Chief,
ReplyDeleteMy immediate reaction to this new proposal is- where will the authority come from?
Will this be a Presidential Exec order or a Congressional action?
Does the POTUS have Constitutional authority to do this , or is Obama pulling a Bush Move?
I'm no Constitutional scholar but isn't the power to control appropriations a Congressional stated power.
jim
Sven: Good points, all, though Pluto does a good job of pointing out the narrowness of the crack in the political wall that prevents those actions from being taken.
ReplyDeleteOne thing that has frustrated me for years is how damn hard it is - on every level, from local townships to the feds - to have a rational discussion of taxation and spending. As Clausewitz would say, taxation is very simple, but the simplest things about discussing taxation is impossibly hard.
I think a LOT of people here in the U.S. see the validity of all your points, Sven. The problem is that accomplishing them requires some people (or several groups of people) to endure some economic pain, and we've become VERY bad at that (not that we were ever really good at it, it's just that other than the very poorest we have a lot more groups with access of some sort to the political process and the will to use it)...
Andy: The slant to the video is mildly Austrian - I figured that its conclusion appealed to you rather than just the format. You point out your general economic ideas in the post followign this one and I stand corrected
I should add that while personally I think that the man was a pretty brilliant economist if you follow his conclusions to their logical end you come up with responses to economic hard times that are both difficult for the citizens of a popular democracy to live with as well as problematic in terms of human misery.
Jim: I'm assuming that the Obamites are talking about "freezing" the actual expenditures rather than the budget itself; directing the executive branch agencies to stop spending the money by executive order.
I assume that if the Congress wishes, it can legally force the Executive to disburse the monies. I doubt it will, but you never know.
Is anyone else tired of this damn kabuki play?
Jim,
ReplyDeleteI think the President's proposal is simply a wish-list for Congress. The Administration will, as they always do, submit a budget proposal to Congress and the news reports on this indicate that these cuts will be included in that budget proposal.
But of course, the administration's budget proposals do not have any legal force - they simply project to the Congress what the Executive's priorities are. Congress, as is always the case, will take them on advisement and then build the budget it wants to build. Whether Congress decides to include the cuts in the actual budget is really a political decision the Congressional leadership will have to make. It's likely they will follow the spirit and cut a few things, but compensate elsewhere. But it seems that the President has put the congress in a bit of a political pickle. The following is from a conservative blog, but I think the analysis is basically sound:
I’m mystified by what he’s trying to accomplish politically here. The basic idea is to win back independents by showing that Democrats are serious about trimming government bloat, right? Well, (a) the savings from the freeze are too small to impress many fiscal conservatives, (b) if Obama does try to compensate by ramping up security spending, he’ll be attacked by righties for having supposedly broken his freeze promise (even though he actually wouldn’t be breaking it, but oh well) and (c) the outrage on the left over even a small freeze may end up convincing indies that congressional Democrats will never, ever cut spending and are simply hopeless — which would be a complete backfire. In fact, given the progressive outcry, it’s an open question if Congress will even sign off on this: Reid is noncommittal, and if ObamaCare goes down, they’re going to have to give the base something or else turnout will collapse in the midterms. This would have made some sense if Obama had tried it in 2012, since then, even if the House and Senate shot it down, he’d benefit personally in the election by being able to claim that at least he tried. But there’s no personal benefit to doing it now. On the contrary, he’s forced congressional Dems — whose political lives are already on the line — into a horrible dilemma: Either they reject the freeze and piss off independents or they approve the freeze and piss off the left. Smooth move, champ.
On this issue I should add that the GOP frustrates me more than the Dems.
ReplyDeleteThe Dems are a clusterfuck. Their party has no coherence, their legislators have no discipline and, as Andy points out above, their Executive has no leadership or, frankly, a clue.
The GOP seems to have simply frozen, like a locked-up Microsoft product that does nothing but show us the Reagan Blue Screen of Death. We've had - and I'm counting the Clinton years in here - pretty much a solid 29 years of tax cuts and deregulation. Nowhere in there has the GOP really even tried to come up with a comprehensive, REALISTIC program that would have matched up their tax giveaways with spending cuts (I don't count the balanced budget portion of the Contract With America - it was never realistic).
Instead we have received an endless stream of tax cuts...and spending increases. While the Dems tax-and-spend, the GOP spends...and doesn't even tax!
So I agree with Andy's right-wing commentor that Obama has fucked this dog - I think he's on a tear to become the next one-term Democratic President.
But my problem is...where's the alternative on the Right? Look around and try to find someone who isn't locked into the BushCo "Tax Cuts! Magical Ponies!" rhetoric.
WASF.
Andy/Chief,
ReplyDeleteI've predicted months ago that O will be a 1 term Prez.No way around it, look at the stats.
Hope is a mighty thin hat rack, especially if you don't have a hat. Words are only words and the voters are getting a few hints that they've been jive talked by a street hustler. This is all fine except i can't discern a RCH difference between O and Bush. I think others are really getting this point also.
Chief,
When u talk of tax cuts and increased spending , i know you are also thinking about 2 useless wars. I just had to raise this point.
Andy,
I roger your transmission. Thanks for the further refinement of my question.
jim
Jim: Not JUST the guns...the GOP fed us lots of butter, too - the damn Medicare Part D was just ridiculous, pure pandering - and all the time most of these "deficit hawks" that are circling around the already-stiffening corpse of the Obama Administration were cooing about the "Party of Personal Responsibility" and how fiscally grown-up and mature the Bushies were.
ReplyDeleteOn a relative scale, we ARE doing these wars on the cheap. It's just that we're doing the revenue collection even cheaper.
Andy said...
ReplyDelete" Money is not being take from current taxation (ie. higher taxes) but from future taxation in the form of borrowed money."
You're writing about payback. I was writing about the origin and where it is being removed from the equation.
The bank cannot lend the same money twice, so if the state lends a dollar from the bank, then some citizen or corporation won't be able to do so.
The economic term for this is "crowding out" (see wikipedia, for example).
Madness:
ReplyDeletehttp://gregmankiw.blogspot.com/2010/01/budget-picture.html