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James Kwak

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Fiscal Affairs: The Impossibility of Defense Cuts

Posted: 04/ 6/2012 8:29 am

Apparently the thing we need to keep ourselves safe is a fast, lightweight ship that can sweep mines, launch helicopters, fight submarines, and perform other assorted duties -- but can't withstand heavy combat. I don't claim to know if we really need the Littoral Combat Ship to ensure our national security. According to an article in the Times, John McCain -- the Republican Party's last presidential nominee and one of the Navy's more famous veterans -- is critical, although other Republicans and the administration are in favor of it.

I do know that the Littoral Combat Ship is a classic example of why it's so hard to reduce budget deficits. You have local politicians who want the jobs. You have a large group of representatives who are reflexively pro-military and will vote for anything the Pentagon wants, and even things the Pentagon doesn't want. (You have Mitt Romney, who bemoans the fact that the Navy has only 285 ships, the fewest since 1917. Would he rather have the Royal Navy of 1812, which had 1,000 ships, or our navy, with eleven aircraft carrier groups -- while no other country has more than one?) You have a procurement and development process that stretches on for years so that even when a weapons system turns out to be a dud, it has to be kept alive because it's too big to fail -- there is no other alternative. Both the Center for American Progress and the Project on Governmental Oversight have recommended cutbacks in the Littoral program. Yet there is no practical way to check its momentum.

An even better example is the V-22 Osprey vertical-takeoff plane, which the Times profiled late last year. Even renowned insider Dick Cheney opposed the Osprey when he was Secretary of Defense, to no avail. Not only CAP and the Project on Governmental Oversight called for Osprey cutbacks, but so did Simpson-Bowles and the arch-conservative (and generally principled) Senator Tom Coburn. In short, just about anyone who cares about the budget wants to cut back on the Osprey. Will it happen? Well, the Paul Ryan budget reverses the automatic defense spending cuts, so we know what he thinks about it. And I'm sure the Osprey has plenty of fans in the administration and the Democratic caucus as well.

In the end, defense spending plays out the same way as Social Security. If you want to reduce government spending, you obviously have to reduce defense spending: it's basically the second biggest part of the budget after Social Security. But it's almost impossible to cut any actual defense spending. Apparently politicians don't realize that a whole is equal to the sum of its parts. Or they do realize it, and they hope that we don't.

One of our core political problems, as we discuss in White House Burning, is that it pays for politicians to take noisy stands against the whole while protecting (or increasing) each individual part. It seems so easy to get away with it -- why would they ever stop?

James Kwak is the co-author of White House Burning: The Founding Fathers, Our National Debt, and Why It Matters To You, available from April 3rd. This post is cross-posted from The Baseline Scenario. Read more from the Fiscal Affairs series here.

 
 
 

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12:13 AM on 04/07/2012
500 words and what the author really meant to say was the following:

"In the end, defense spending plays out the same way as Social Security."

This is guilt by association, and quite frankly beneath an honest intellectual discussion. The author should know the difference between the two in terms of the manner of appropriation of funds, long term and short term degrees of stability, impact on economy, etc. There are many good economists that argue that Social Security is not in trouble, some presenting their views on this site periodically. If Mr. Kwak disagrees with their assessments, he should present his views in a straightforward manner with detailed arguments.
09:15 PM on 04/06/2012
WIth all due respect to the professor he is missing the big picture. While it is true that billions are being wasted on unnecessary weapons that add only marginally to our Defense, that represents less than 10 to 15% of the Defense Budget. The big money is on pay and benefits that has grown to out of control levels. How about over 900 Generals and thousands of officers and the 4 services that is an outdated model for the 21st Century and beyond. I am for a strong and effective Defense but the status quo is not what we need. Institutional costs versus operational costs and the rice bowls is where the real change is required.
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GrantS
I'm liberal through and through.
08:02 PM on 04/06/2012
Thanks for nothing James Kwak. Maybe a suggestion or two would have helped.
07:36 PM on 04/06/2012
We have to ask ourselves: Defense of what ? Defense of National interests, more than Defense of the geographical Country.
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HUFFPOST SUPER USER
FogBelter
Illegitimis non carborundum
07:01 PM on 04/06/2012
Mr Kwak, I believe the link below to the 1998 HBO film "Pentagon Wars" illustrates the situation quite succinctly:

Pentagon Wars - Bradley Fighting Vehicle Evolution

http://www.youtube.com/watch?v=aXQ2lO3ieBA
06:37 PM on 04/06/2012
In order to reduce defense (like SS and Medicare, it must be reduced), the President must change the fundamental foreign policy doctrine. Obama has followed identical path as other Presidents and uses the US military and our willingness and ability to project force as a fundamental component of our foreign policy. Until the US changes course and moves from an offensive military to a defensive military, you will not see significant cuts in military spending. It will take courage but this is the essential change the must be made or we will continue to waste massive $ and lives.
05:20 PM on 04/06/2012
Getting the 112th Congress, let alone any other Congress, to cut DOD's budget is a monumental task. Just ask Secretary of Defense Leon Panetta. He has found numerous ways to cut DOD's budget, but Congressmen start screaming like a wild banshee. No doubt the DOD's budget will have to be cut lest it consume the entire discretionary portion of the federal budget.
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waltifarian
Quis custodiet ipsos custodes?
04:36 PM on 04/06/2012
"In the end, defense spending plays out the same way as Social Security. If you want to reduce government spending, you obviously have to reduce defense spending: it's basically the second biggest part of the budget after Social Security."

Social security is paid into directly from payroll deductions, its a worker funded insurance program. The DOD isn't. Comparing the two is apples and oranges. The Military budget is increasingly like the old adage about marketing budgets: I know half of my marketing budget is wasted, I just cannot tell which half. What's worse, the veil of secrecy can be (often dubiously) claimed for many of them making public accountability very, very hard to maintain. A sure lure to crooks and cons in any day and age. And by that I mean mostly civilian contractors, their lobbyists and the Congressman that love them, as most military personel I know complain and point up examples of massive taxpayer DOD waste all the time.
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iskra
Natural enemy of sharks and tro//s
03:59 PM on 04/06/2012
It's a giant Red state welfare program and it'll never be cut at all if Republicans have their way. The MIC is pretty good at spreading the money around to all the states, but the states that rely on it as their economy the most and have the highest per capita spending are all Red states.
06:13 PM on 04/06/2012
Republican Ron Paul is the only candidate that wants to massively cut wasteful military spending. Along with the trillions we waste overseas overthrowing governments, bombing civilians, nation building, 'spreading democracy', occupying counties, and building military bases all over the world - which all CREATE our enemies.
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iskra
Natural enemy of sharks and tro//s
09:43 AM on 04/07/2012
That is true. I think he might be going a bit far with the isolationist mentality but he is the only one talking about it.
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GentleGim
The opposite of austerity is GROWTH.
03:48 PM on 04/06/2012
Want to balance the federal budget? End war profiteering and nationalize all defense contracts. Remove the profit motive and you save trillions every year.
KIampfbeobachter
Misanthropic economic and political shaman
06:47 PM on 04/06/2012
Out of the depth of my memory comes a sentence from John Kenneth Galbraith.

"Let's nationalize the defense industry. We own it anyway."
"Affluent Society??" Maybe.
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jamenta
There are other human values besides greed.
03:28 PM on 04/06/2012
It's troubling to read Social Security closely tied to our out-of-control defense budget spending and Militarism. First of all, Social Security depends on a separate direct payroll deduction by all American workers. Our Social Security currently has a 2.6 Trillion surplus and is perhaps the most successful governmentally run program since it was instituted by FDR. Social Security is efficient and pays back all those Americans who have worked all their lives and contributed to our American society - regardless if they became a Wallstreet billionaire stockbroker or a corporate CEO.

Our military budget - which has tripled since 1997 (nothing like Social Security) - and of which the last two wars started by a GOP president - was not EVEN INCLUDED IN THE BUDGET - is now greater than all other nation's on earth COMBINED. Our military budget - unlike our Social Security - is the #1 cause we Americans are in a huge debt crisis. Social Security has not added one dime to our debt.

I find this blog post disconcerting and there is a kind of implication by association - being deliberately manufactured here that IMO is a falsehood.
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Edward Lee
It's impressive to be progressive
03:58 PM on 04/06/2012
You're absolutely correct. We all pay taxes on Social Security and Medicare so that when we retire, we have a modicum of stability. Medicare does have a funding problem and needs to be dealt with, but SS is completely solvent, at least on paper. The only reason it's in trouble is because our government, Bush one of them, raided the surplus to start two wars and gave two tax cuts. Remember Bush regretted not being able to privatize SS? What was the incentive? It would present a gigantic financial fortune to Wall Street, and we know who funded the GOP, right?
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vcgh2000
11:40 PM on 04/06/2012
Much as I believed that Ronald Reagan started the raid on the Social Security Trust Funds, I found out recently that the Interstate Highway System was funded in part from using "surplus" Social Security Funds.
It seems that this has been an ongoing "cash cow" for a lot of Federal programs.
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aldo
My 2 Cents
04:40 PM on 04/06/2012
Wouldn't it be great if we had a 'direct payroll deduction' to pay for all military spending. People might then see what it really cost to be a Superpower.
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vcgh2000
11:49 PM on 04/06/2012
At least the debate has begun. Now it is left for future generations to bring this "Superpower" expenditures out into the light.
For years it was considered unpatriotic to question "Defense" expenditures, now I seem to detect an understanding of just what this has cost. Great idea, the Superpower deduction.
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ekim gnitlon
03:26 PM on 04/06/2012
I wonder how conservatives and war mongers explain this. Cut social security and build more ships?
Really.
06:16 PM on 04/06/2012
Ron Paul wants to stop spending these trillions overseas and spend that money at home on useful things like social security (until we can find a sustainable solution to replace social security). Every other candidate will continue perpetual wars, debt, and continuing towards a broke, corporate owned police state.
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GrantS
I'm liberal through and through.
08:08 PM on 04/06/2012
Ron Paul only represents 10-15% of republicans.

He's a nobody.
KIampfbeobachter
Misanthropic economic and political shaman
06:50 PM on 04/06/2012
Boehner is on record having said: "In order to pay for our wars we have to cut Social Security and Medicare."
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FreedomMan
Writer, Illustrator, Philosopher
03:12 PM on 04/06/2012
Perpetual War is beneficial to the Military/Industrial/Corporate Government systems.

Perpetual peace is beneficial to the infrastructures, small business and social programs for the people.

It all comes down to what and who your tax money is spent on.
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iskra
Natural enemy of sharks and tro//s
03:59 PM on 04/06/2012
And where it's spent, let's not forget which states are the biggest beneficiaries.
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MassWG
02:59 PM on 04/06/2012
When libs like Reich and Krugman call for stimulus, don't they realize defense spending IS stimulus? We are at a point where it is impossible to make significant cuts anywhere due to the impact on the economy, but we have to admit that GDP is a metric that is worse than useless, it is deceiving.

It is time to start differentiating between economic activity that generates needed goods and services and economic activity that does not. Bridges to nowhere will take us... nowhere. If government wants to remain in the business of spending trillions of dollars to boost GDP, it should stop pissing that money away and go into the business of making something useful - preferably something that other countries will import, so we can reduce our trillion-dollar trade deficit.

"GDP does not, and cannot, reflect the waste of enormous effort, and precious natural resources, that went into building something that suddenly no one wants. Yes, all of the malinvestment made GDP soar, but ultimately just wasted capital."
http://mises.org/daily/3843

The irony of endless military "defense" spending is that it directly contributes to the only imminent threat this county faces, one that we need urgently to defend against: the demise of our currency. Sadly, we're trying to defend dollar hegemony by military force, which will only serve to bring sudden collapse rather than gradual transition.
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GrantS
I'm liberal through and through.
08:11 PM on 04/06/2012
While you are correct that defence spending is stimulus there is no debate taking place as to whether it is the best choice of stimulus.

It could easily be argued that education or infrastructure spending would have better long-term results.
02:38 PM on 04/06/2012
There is an alternative to cutting spending, however I suspect it is equally distastefull to the politicians, raise taxes to pay for it all.
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aldo
My 2 Cents
04:41 PM on 04/06/2012
Yes Republicans, end your 'starve the beast' strategy.