The Other Stimulus Bill

There's a lot of talk about waste in the $787 Billion Stimulus bill. Yet there is almost no debate at all about a stimulus bill of near equal size that contains far more waste.

governments around the world are throwing billions into the one sector of their economies that will probably do the least good for the world: their military-industrial complexes.

The United States is a case in point. Last month, the Obama administration released a budget blueprint for the upcoming fiscal year that included $534 billion for the Department of Defense, as well as $130 billion for the wars in Iraq and Afghanistan. At $534 billion, President Barack Obama’s Pentagon budget is $9 billion, or 1.7 percent, greater than the previous year’s budget after adjusting for inflation.

“a well-founded rule of thumb is to take the Pentagon’s (always well publicized) basic budget total and double it. We may overstate the truth, but if so, we’ll not do so by much.”
- Dr. Robert Higgs

America's military spending is so disproportionate to the rest of the world that it defies logic, unless you view it in the context of a pork-laden stimulus bill. Even more than the wasteful wars in Iraq and Afghanistan, even more than the $434 hammers and $600 toilet seats, the main responsibility for this massive spending is useless weapons programs.

The reports by the government watchdog agency concluded the Army is moving forward with the $159 billion Future Combat Systems program even though some of its technology is unproven and over budget. The Joint Strike Fighter program, which could ultimately cost $1 trillion to build and maintain roughly 2,500 planes, will face even higher costs if the Pentagon accelerates the program while testing continues.

The two are among the largest weapons contracts ever awarded by the Pentagon, and are potential targets for budget cuts as pressure grows on the military to lower spending as the government devotes trillions of dollars to the financial crisis.
...
Buying jets while they are still being tested "does not seem prudent," the report states.

One of the poster boys of this wasteful spending is the F-22 Raptor. We've already spent $65 Billion to design and produce this fighter jet - originally designed to penetrate the defenses of the long-extinct Soviet Union. It currently lacks any imaginable war-fighting scenario, but that didn't stop 200 members of Congress from writing President Obama "Dear Mr. President, Save the F-22".

There is a point to be made that the size of our military budget is actually a national security risk, by weakening our economy and causing us to be dependent on foreign creditors in competing nations. We have 721 military bases in 150 countries around the world. We still have 57,000 troops in Germany and 33,000 in Japan.
Why? World War II was more than two generations ago.

“As U.S. economic difficulties worsen, the belief that the country can afford to maintain this (aggressive military) posture may itself prove to be the most profound threat to our national security.”
- Mark Engler

Our "hidden" military costs include $17 Billion of nuclear missile costs at the Department of Energy, $69 Billion at the Department of Homeland Security, $25 Billion of defense related spending at the Department of State, $70 Billion at the Department of Veteran Affairs, and $38 Billion for military retirement at the Department of the Treasury.
Many of these expenditures so-called military hawks who defend the military budget, want to cut by calling them "pork". It's ironic that, outside of the VA, these are indeed largely pork. It's just that they are also military spending.
These aren't trivial amounts. You could fund the National Cancer Institute for 3 years just on what the Department of Energy spends to support the military.

Yet the military budget has become a political "third rail" that neither party wants to even discuss. The GOP has beaten the Democratic Party so badly on this subject that the Democrats are terrified to even approach the subject.
It's this lack of debate that has allowed the size of the fiscal abuses to remain hidden.

It’s as if the military budget were invisible or accepted as a given. People will argue endlessly over whether it’s better to cut Medicare benefits or to end tax breaks for the rich, but few analyze or question the actual costs of the military to this country.

Fortunately, the National Priorities Project is taking a critical look at military spending. It calculates that the total cost of the military—including actions obscured elsewhere in the budget—was $1.169 trillion in 2008, almost three times the amount spent on health care, 10 times the amount spent on education, and 10 times the amount of Temporary Aid to Needy Families. It is not the old, sick, young and needy who are driving our national indebtedness.

It's these twisted priorities that favor guns over health care and education, that has made this country into an gluttonous pig, feasting on the savings of the world.

As you can see, there simply isn't much more savings left in the world that America can consume. We are paying for decades of a complete lack of effective oversight.
We didn't get into this situation suddenly. It's been building for a while, and the debt has been accumulating for a while. We are currently spending $207 Billion a year to pay interest on the debt from past military spending. This has left the nation handicapped paying for past, wasteful, military weapons that often didn't work as promised.

The American Empire

In the late 1980's Paul Kennedy wrote The Rise and Fall of the Great Powers. This book, more than anything else, got me interested in macroeconomics. 10 years later, Kennedy wrote an article in The Atlantic in which he coined the term that largely summed up an important idea from his book - Imperial Overstretch.

imperial overstretch n. The extension of an empire beyond its ability to maintain or expand its military and economic commitments.

Empires are expensive. Prolonged wars lead to first monetary inflation, and then price inflation. (more than half of the federal discretionary budget since 2003 has been dedicated to military spending) Foreign conquest tends to lead to other foreign wars, and eventually, ruin.

"The U.S. dollar is a 'faith-based currency' dependent on the credibility of a central bank"
-- Dallas Federal Reserve Bank President Richard Fisher

"The U.S. prefers a "weak" dollar because it helps the nation's exporters. That's Zimbabwe economics."
- Steve Forbes

Nobel Prize-winning economist Joseph Stiglitz tried to tell America something important a few years ago, but few people paid attention.

THE Iraq war has cost the US 50-60 times more than the Bush administration predicted and was a central cause of the sub-prime banking crisis threatening the world economy.
[...]
The spending on Iraq was a hidden cause of the current credit crunch because the US central bank responded to the massive financial drain of the war by flooding the American economy with cheap credit.

"The regulators were looking the other way and money was being lent to anybody this side of a life-support system," he said.

That led to a housing bubble and a consumption boom, and the fallout was plunging the US economy into recession and saddling the next US president with the biggest budget deficit in history, he said.

Stiglitz never used the term "imperial overstretch", but he may as well have.
Wars need cash. Lots of cash. Mountains of cash. When the world is running on a fiat currency, when all it takes to create a mountain of new cash is a few keystrokes on a computer, then you can bet your last nickel that the government will chop down every last forest in order to print all the dollars it needs to feed the hungry maw of the war machine.

Even while America exerts its will upon the world through the barrel of a gun, the entire effort is causing the American economy to sicken and die. It is crushing our industrial base, our middle class, and our credibility in the world. Empire isn't just the antithesis of democracy, it is incompatible with a healthy economy.

"As we peer into society's future, we – you and I, and our government – must avoid the impulse to live only for today, plundering for, for our own ease and convenience, the precious resources of tomorrow. We cannot mortgage the material assets of our grandchildren without asking the loss also of their political and spiritual heritage. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow.

"Down the long lane of the history yet to be written America knows that this world of ours, ever growing smaller, must avoid becoming a community of dreadful fear and hate, and be, instead, a proud confederation of mutual trust and respect.
- President Eisenhower, 1960

Comments

I've got one, the border fence

I find this entire thing beyond stupid. It's this continual "politically correct" i.e. read please don't stop the flow of: a) cheap labor b) remittances c) $30B drug industry d) NAFTA e) truckers to labor arbitrage the teamsters f) gun exports

crap of the U.S. - Mexico border. They spend billions rambliing on about virtual fences when the good old fashioned cheap double walled fence is proving to work by the statistics.

There have been 9,000 murders, grizzly beheadings, mayhem, S. of the border. As I recall beheadings in Iraq made front page news, horrified the nation, yet this is going on right to the South, way more torture, kidnappings, beheadings and glorified terrorism under the guise of "drug war" going on right on our own border and they still will not just plain do what works and do it fast.

These damn drug cartels have an obviously distribution network in the U.S., using people who are in the country illegally....and nope, can't do anything about that either...

I'm sorry but the evidence is beyond scary and these drug cartels are operating in almost every town in the United States of any size population...

So, while they build cold war billion dollar military machines, a really dangerous situation goes ignored.

The entire "virtual fence" is all about bloated DoD/DHS contracts and also about delaying any controls on the border so all of this activity listed above can continue unabated.

It's time for people to stop being manipulated by choice sounding keywords of "oh that's racist" or that's "xenophobic" and realize we have one of the bloodiest drug cartel wars, fighting over U.S. markets, completely operating in almost every single U.S. town going on right at this moment and they make Al-Qaeda look like chicken feed.