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View Full Version : Do you think we should be reducing Defense spending but increase total spending?



genglandoh
02-10-2013, 06:41 PM
Looking at the Total and Defense spending from 1961 to today you can see that
1. Total Government Spending when from 97 Billion in 1961 to 3,603 billion in 2011.
2. Defense Spending went from 49 Billion in 1961 to 705 Billion in 2011.
3. As a % Defense spending was 51% in 1961 and was 20% in 2011.


You can see that as things stand Defense spending is estimated to drop from $705 Billion to $589 or a -16% drop in spending.

Do you think we should be reducing Defense spending -16% but at the same time increase total spending +26%?


You can get the data from the Whitehouse website.
http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/hist03z1.xls

http://farm9.staticflickr.com/8105/8463477130_3e0caf3e4c_z.jpg

Paul Pless
02-10-2013, 06:46 PM
Do you think we should be reducing Defense spending

Yup


but increase total spending?

Nope

S.V. Airlie
02-10-2013, 07:10 PM
Depends on what it would be spent on..not that have the money.

leikec
02-10-2013, 07:17 PM
I think we should reduce defense spending by 20% over the next 10 years, and we should strive to lower our debt-to-GDP ratio by five points over the same time frame.

Jeff C

LeeG
02-10-2013, 07:17 PM
Sure, military spending should decrease in comparison to investing in our domestic infrastructure, physical and intellectual.

Keith Wilson
02-10-2013, 08:26 PM
Talking about government spending in raw dollars obscures far more than it clarifies.

Here's a better way of showing the same data.

http://nationalpriorities.org/media/uploads/peoples_budget/fed_revenue_outlays_1930_2016_gdp.png

hanleyclifford
02-10-2013, 08:35 PM
Now Keith, how about a nice graph that shows government spending (including debt service) as a % of GDP?:)

Keith Wilson
02-10-2013, 08:46 PM
That includes debt service. Interest rates are low, it isn't much.

http://www.cato.org/sites/cato.org/files/wp-content/uploads/201002_blog_edwards3.jpg


This is a closer look at recent budgets, showing the effects of the Bush tax cuts.

http://2.bp.blogspot.com/-EspQGNZmefk/UIyzl9-KWLI/AAAAAAAACwE/48RTIxuxF6s/s1600/image1283.png


For a party that talks a log about fiscal responsibility, they don't seem to be very good at it, do they?It should be obvious by now to anyone who's paying even a little attention that Republican talk about 'fiscal responsibility' is just to BS deceive the proles. They believe in low taxes for the wealthy; all else is inconsequential.

hanleyclifford
02-10-2013, 08:49 PM
I like this one: http://2.bp.blogspot.com/-7M6Qk22TGko/UDMQywXhifI/AAAAAAAARVM/AUKK51HNBPM/s1600/Governemnt%2BSpending%2Bas%2BPercent%2Bof%2BGDP%2B-%2BFederal.png

hanleyclifford
02-10-2013, 08:51 PM
To be fair, the Obama administration does not appear to be the big spender some would imply.

Keith Wilson
02-10-2013, 08:52 PM
It's vastly better then the stuff in the OP, but it would be better if it the Y-axis went down to zero.


To be fair, the Obama administration does not appear to be the big spender some would imply.Ya think? I may not agree with you on what should be done, but you're a man who can look at reality. Y>

hanleyclifford
02-10-2013, 08:53 PM
It would seem the non defense spending is much more worrisome than defense.

Keith Wilson
02-10-2013, 08:55 PM
Not necessarily. What do we get for it?

hanleyclifford
02-10-2013, 09:01 PM
Not necessarily. What do we get for it? Not enough. Despite our differences on what should be done about it I think we agree that most of the increase is beyond Obama's control. As you have pointed out health care is the biggie that will bankrupt us. We agree on the solution for that. The defense is another matter. Suggestion?

johnw
02-10-2013, 09:51 PM
Looking at the Total and Defense spending from 1961 to today you can see that
1. Total Government Spending when from 97 Billion in 1961 to 3,603 billion in 2011.
2. Defense Spending went from 49 Billion in 1961 to 705 Billion in 2011.
3. As a % Defense spending was 51% in 1961 and was 20% in 2011.


You can see that as things stand Defense spending is estimated to drop from $705 Billion to $589 or a -16% drop in spending.

Do you think we should be reducing Defense spending -16% but at the same time increase total spending +26%?


You can get the data from the Whitehouse website.
http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/hist03z1.xls

http://farm9.staticflickr.com/8105/8463477130_3e0caf3e4c_z.jpg

I think our defense spending can come down:

http://old.armscontrolcenter.org/policy/securityspending/articles/us_vs_world.gif

The red on this chart is what we're spending on wars. End those wars, we should be able to cut that spending.

http://upload.wikimedia.org/wikipedia/commons/thumb/5/55/U.S._Defense_Spending_Trends.png/800px-U.S._Defense_Spending_Trends.png

As for the spending side, we live in a democracy. If the people want the federal government to spend more money, they need to be willing to pay for it, and that means taxing themselves. If they are not willing to pay for it, they need to accept that it will have to cut spending. What can't go on is spending more than we're willing to pay for.

hanleyclifford
02-10-2013, 10:22 PM
Good post, John; and yeah, defense spending could come down if we would stop trying to police the planet.

Ted Hoppe
02-10-2013, 10:23 PM
How about - Eliminate all current and future employee federal retirements. Make it match current employer 401k contributions instead.
No new military retirements. Problem solved.

The government paid a record $268 billion in pension and health benefits last year to 10 million former civil servants, military personnel and their dependents, about $100 billion more than was paid a decade earlier after adjusting for inflation. And $7 billion more was deposited into tax-deferred accounts of current workers. The amount paid to federal retiries matches the total paid by social security for same year. It will be more than social security in 3 years. It is projected within 10 years to double that of the total paid out by Social Security reciepants.

hanleyclifford
02-10-2013, 10:28 PM
How about - Eliminate all current and future employee federal retirements. Make it match current employer 401k contributions instead.
No new military retirements. Problem solved. A nice little war would be more efficient (and easier to get thru Congress).

Ted Hoppe
02-10-2013, 10:52 PM
A nice little war would be more efficient (and easier to get thru Congress).

the weekend talk shows seem to be a buzz over politically motivated faulty Iranian data. Nice to see such bipartisan agreement just when debate begins on military reductions.

David G
02-10-2013, 10:59 PM
How about - Eliminate all current and future employee federal retirements. Make it match current employer 401k contributions instead.
No new military retirements. Problem solved.

The government paid a record $268 billion in pension and health benefits last year to 10 million former civil servants, military personnel and their dependents, about $100 billion more than was paid a decade earlier after adjusting for inflation. And $7 billion more was deposited into tax-deferred accounts of current workers. The amount paid to federal retiries matches the total paid by social security for same year. It will be more than social security in 3 years. It is projected within 10 years to double that of the total paid out by Social Security reciepants.

As a junior economist I have to think think about incentives. A good retirement and general benefit package is one of the incentives the federal government uses to induce people to work for them. Usually for less salary than someone with the same skillset would receive from private industry. If you change the benefits for all new hires then salaries will have to increase to compensate... or we'd have to accept less-qualified government employees (yeah... that's what we need). I don't know of what analysis has been done to see which approach is more efficient - higher salaries vs. better benefits - or whether the calculus has changed over times (I suspect it has).

As a businessman - I have to think of the legalities of the terms of employment. We negotiated contracts with all those people bases upon certain terms. If they fulfilled the contracts, so must we. If we make changes from this point forward - as might be a good idea - the financial impact will be felt many years down the line. Not right now. It might still be a good idea (or not... pending analysis)... but it's NO quick fix.

hanleyclifford
02-10-2013, 11:07 PM
David, I'm not sure I accept that notion that the government pays less for the same work. It might have been true once upon a time, but not now.

David G
02-10-2013, 11:08 PM
Our fried geng seems to have a positive talent for looking at issues in such a way as to obscure rather than illuminate the issue. I imagine this has an unfortunate effect on his view of the world, and how it should be governed.

hanleyclifford
02-10-2013, 11:13 PM
Our fried geng seems to have a positive talent for looking at issues in such a way as to obscure rather than illuminate the issue. I imagine this has an unfortunate effect on his view of the world, and how it should be governed. Agreed the question is oddly framed, but the issue is real and can be addressed.

David G
02-10-2013, 11:14 PM
David, I'm not sure I accept that notion that the government pays less for the same work. It might have been true once upon a time, but not now.

You'd have to show me hard numbers indicating otherwise. It's been shown to be true in recent analyses I've seen, and it's true per my anecdotal experience - most recently watching college grads of my acquaintance make employment decisions. The only caveat I would readily accept is that - long term contracts (like many govt. jobs) have sheltered some from the wage freezes and dips more quickly enacted by employment at will positions (most private sector jobs). But that phenomenon is but a blip on the radar, and will fall back in line with the larger pattern as the economy stabilizes.

hanleyclifford
02-10-2013, 11:22 PM
My anecdotal experience is that government employees at all levels receive COLAs and other increases and benefits not enjoyed in the private sector. But I am open to "hard number" evidence.

Ted Hoppe
02-10-2013, 11:30 PM
As a junior economist I have to think think about incentives. A good retirement and general benefit package is one of the incentives the federal government uses to induce people to work for them. Usually for less salary than someone with the same skillset would receive from private industry. If you change the benefits for all new hires then salaries will have to increase to compensate... or we'd have to accept less-qualified government employees (yeah... that's what we need). I don't know of what analysis has been done to see which approach is more efficient - higher salaries vs. better benefits - or whether the calculus has changed over times (I suspect it has).

As a businessman - I have to think of the legalities of the terms of employment. We negotiated contracts with all those people bases upon certain terms. If they fulfilled the contracts, so must we. If we make changes from this point forward - as might be a good idea - the financial impact will be felt many years down the line. Not right now. It might still be a good idea (or not... pending analysis)... but it's NO quick fix.

I understand how you would come to that conclusion - but it is outdated notion left over from the unionism progressivism of the post war. Now very few companies offer any pensions except for senior executives who are rewarded for doing exactly what i posted the government to do. It is unsustainable for the large shareholders of corporations as it is for this country. In simplistic terms - public service was to be a calling to duty for one's country - not a road to millionaire row by the age of 50. It could be seen in certain light as selective governmental socialism. Add to the fact not included in my previous post, add the free medical care an it really becomes amazing that so many get such benefits while others who work just as hard do not.

Frankly most people hired today do not receive signing bonuses. most are responsible for our own retirement planning by using our own money. With the loss of huge middle manager positions, declining skilled workforce and exponential medical costs for those who do not qualify for subsidized medication... it is quite outrageous for the government to continue provide federal employees with benefits lost a decade ago by the civilian nongovermental population.

johnw
02-10-2013, 11:37 PM
Good post, John; and yeah, defense spending could come down if we would stop trying to police the planet.

Do you suppose 'starve the beast' would work on the military?

David G
02-10-2013, 11:38 PM
You seem to be responding to the phenomenon I mentioned earlier - where long term contracts shelter people from changes that affect some others more immediately. A temporary phenomenon, as I said, methinks.

If you think the calculus is outdated... how about an update. Hard data, please.

hanleyclifford
02-10-2013, 11:39 PM
Do you suppose 'starve the beast' would work on the military? No, the military is under control of the CIF (or should be).

johnw
02-10-2013, 11:45 PM
No, the military is under control of the CIF (or should be).

CIF?

hanleyclifford
02-10-2013, 11:53 PM
CIF? Commander in Chief. The point being that the President should control his use of the military based on what Congress is willing to spend. We have had too much of unrestricted military adventure in recent years. IIRC it is Congress that makes war.

johnw
02-11-2013, 12:52 AM
Commander in Chief. The point being that the President should control his use of the military based on what Congress is willing to spend. We have had too much of unrestricted military adventure in recent years. IIRC it is Congress that makes war.

That would be CIC. I'd say having a large military constitutes a moral hazard for presidents. And not only can he not spend more than Congress appropriates, he's also not allowed to spend less.

Paul Girouard
02-11-2013, 01:09 AM
That would be CIC. I'd say having a large military constitutes a moral hazard for presidents. And not only can he not spend more than Congress appropriates, he's also not allowed to spend less.

CIC / CIF , pretty close , but miles apart. Now to the moral hazard part, how can size effect the spending choices you gave us?

Is our military to large, yes. Is it to large for the mission profiles the Presidents draw up, no! So the mission requirements need to be cut , drastically before the military is gutted. Of course we're going to attempt it bass-ackwards!

johnw
02-11-2013, 01:23 AM
CIC / CIF , pretty close , but miles apart. Now to the moral hazard part, how can size effect the spending choices you gave us?

Is our military to large, yes. Is it to large for the mission profiles the Presidents draw up, no! So the mission requirements need to be cut , drastically before the military is gutted. Of course we're going to attempt it bass-ackwards!

No, the mission is already changing. The two-war doctrine is gone.


http://www.telegraph.co.uk/news/worldnews/northamerica/usa/7140418/Pentagon-abandons-two-war-doctrine.html
Pentagon abandons two-war doctrine The US is to abandon its doctrine of always being ready to fight two simultaneous conventional wars.
http://i.telegraph.co.uk/multimedia/archive/01570/Robert-Gates_1570766c.jpg Secretary of Defense Robert Gates during a press conference to announce the Defense Budget Proposal held at the Pentagon Photo: GETTY IMAGES






By Alex Spillius in Washington

7:16PM GMT 02 Feb 2010


Robert Gates, the US defence secretary, said instead the Pentagon will shift its focus to a broader range of challenges including terrorism and cyber-security.

In a sweeping review of US military strategy, he said the Pentagon must prepare for an "uncertain security landscape" where extremists or "non-state actors" sought missile technology or weapons of mass destruction.

Warning that US military power faced new limits and constraints, he said that weaponry, tactics and enemies had overtaken the "familiar contingencies that dominated US planning after the Cold War".

"We have learned through painful experience that the wars we fight are seldom the wars that we planned," said Mr Gates, as he presented the Pentagon's Quadrennial Defence Review and the 2011 budget plan to the Senate armed services committee.




Congress hasn't caught up. They still want money spent on stuff the Pentagon no longer wants, like a lot more tanks.

Paul Girouard
02-11-2013, 01:36 AM
They better figure on throw out all the $hit we have in the desert as it's all gonna be trashed . You can't operate equipment in that type of environment and expect to get a normal life cycle out of it. Long run on most of it , it will be cheaper to defuel it while in-route back to the states and jettison most of it over the side.

Do you think we can stick to the one war at a time, and do you think we are totally in control of that situation?

johnw
02-11-2013, 01:57 AM
The illusion that we are in control has caused a lot of problems. Maybe without that illusion, we can stick to one or no wars at a time.

Paul Girouard
02-11-2013, 01:58 AM
Maybe without that illusion, we can stick to one or no wars at a time.


Lets hope we can.

Gerarddm
02-11-2013, 03:11 AM
#2. +1

hanleyclifford
02-11-2013, 08:25 AM
That would be CIC. I'd say having a large military constitutes a moral hazard for presidents. And not only can he not spend more than Congress appropriates, he's also not allowed to spend less. I apologize for the typo...was late at night.

genglandoh
02-11-2013, 09:52 AM
Looking at the Total and Defense spending from 1961 to today you can see that
1. Total Government Spending when from 97 Billion in 1961 to 3,603 billion in 2011.
2. Defense Spending went from 49 Billion in 1961 to 705 Billion in 2011.
3. As a % Defense spending was 51% in 1961 and was 20% in 2011.


You can see that as things stand Defense spending is estimated to drop from $705 Billion to $589 or a -16% drop in spending.

Do you think we should be reducing Defense spending -16% but at the same time increase total spending +26%?


You can get the data from the Whitehouse website.
http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/hist03z1.xls

http://farm9.staticflickr.com/8105/8463477130_3e0caf3e4c_z.jpg


What these numbers show are
1. Defense spending is a small part of total spending.
2. Total spending has been increasing much faster then Defense Spending.
3. Even if the projected Defense cuts take place Total Spend will not drop.

What some of the posts has showed me.
1. Some on this forum are trying to deny spending is a problem.
2. The US is spending a lot on Defense. (48% of the worlds total)

What I would do.
1. Reduce Defense spending yes by bring most (not all) of our troops home from Europe.
2. We should also get some saving from winding down of the Mid-east wars.
3. But we should also cut total spending.

John Smith
02-11-2013, 11:00 AM
To be fair, the Obama administration does not appear to be the big spender some would imply.
Try telling that to Fox viewers.

I was once asked by a Linden LaRouche (remember him) supporter about what kind of national defense I would like. I responded I wanted the best defense we can afford, and that's an important part of the answer.

I've been pondering an article of the high cost of defense. The more we spend on defense, the less we have to spend elsewhere, and over time the cost of not spending in those other areas can leave us with nothing worth defending.

I can remember when this country had an infrastructure that was the envy of the world. That's gone. If there was a time when we had the best healthcare system in the world, that time as passed. We used to have a public education system that was wonderful; today we are falling behind many other nations.

A key factor here is they don't have our defense budget.

Our defense budget is far in excess of what is needed. You can look at is as many times what any other country spends. You can look at it through cost overruns on equipment/weapons we buy, many of which are obsolete and the military doesn't want or need.

http://www.thedailyshow.com/watch/thu-february-7-2013/tanks--but-no-tanks

Either way, it is costing us in many ways; ways we cannot afford.

johnw
02-11-2013, 01:14 PM
I apologize for the typo...was late at night.

No problem, just thought there was some alphabet soup I didn't understand.

peb
02-11-2013, 02:32 PM
Do you think we should be reducing Defense spending -16% but at the same time increase total spending +26%?



Reduction in defense spending seems to be a necessity right now; increasing total spending is sheer lunacy. Do you realize that every cent of new federal debt so far this year has been funded by the Federal Reserve printing money. If you guys think this can continue, I have a question for you: why do we not just eliminate all taxes and allow the federal government to spend as much as anyone wants with newly created dollars?

Keith Wilson
02-11-2013, 02:48 PM
why do we not just eliminate all taxes . . Whatever the virtues or vices of current policy, this is a logical fallacy, on the line of "If I drank a case of beer it would be very bad, therefore drinking two beers is very bad." Many things can be done on a smaller scale that would be disastrous on a larger scale.

johnw
02-11-2013, 02:58 PM
Reduction in defense spending seems to be a necessity right now; increasing total spending is sheer lunacy. Do you realize that every cent of new federal debt so far this year has been funded by the Federal Reserve printing money. If you guys think this can continue, I have a question for you: why do we not just eliminate all taxes and allow the federal government to spend as much as anyone wants with newly created dollars?

Who on this forum has made that argument?

peb
02-11-2013, 03:12 PM
Whatever the virtues or vices of current policy, this is a logical fallacy, on the line of "If I drank a case of beer it would be very bad, therefore drinking two beers is very bad." Many things can be done on a smaller scale that would be disastrous on a larger scale.

So you are arguing that deficit spending on the order of >$1t/year being financed by the printing of new money is something being done on a small scale? If that is not your argument, then you have not made the case that my argument is a logical fallacy. Nevertheless, answer this question: how much deficit spending is acceptable to be funded via the printing of money? I think the left in this country, who argue against any balanced approach to solving the fiscal crisis every time a new deadline occurs owes the country that answer.

hanleyclifford
02-11-2013, 03:14 PM
Who on this forum has made that argument? I believe both Keith and David have so argued; correct me if I'm wrong.

peb
02-11-2013, 03:14 PM
Who on this forum has made that argument?
No one has, but it seems a valid question to ask when no one sees any problem with deficits at these levels being funded by the creation of new money (which I may add is a very regressive tax in the long term).

Keith Wilson
02-11-2013, 03:18 PM
. . . how much deficit spending is acceptable to be funded via the printing of money?How much will cause interest rates to rise?

The logical fallacy is the claim that the bad effects from eliminating all taxes is evidence for bad effects from doing what we're doing now. (Drinking the whole bottle will make you sick, therefore don't drink any.) What we're doing now may very well not be a good idea, but that isn't evidence for it.


. . . which I may add is a very regressive tax in the long term How is that?

peb
02-11-2013, 03:30 PM
How much will cause interest rates to rise?

The logical fallacy is the claim that the bad effects from eliminating all taxes is evidence for bad effects from doing what we're doing now. (Drinking the whole bottle will make you sick, therefore don't drink any.) What we're doing now may very well not be a good idea, but that isn't evidence for it.

How is that?

Keith, as we are now witnessing, interest rates will not rise if there is a guaranteed buyer of all new issues. Until, that is, inflation finally kicks in. We do not have a bond market evaluating payment risk functioning at this point, the market is the Federal Reserve. Hence, in the short term, and maybe even for quite sometime, interest rates are a bad indication of if the government is generating too much new debt. As to you last question, that is the whole point of my first argument: if just printing money to fund all of government spending is not a regressive tax, then it would seem that my proposal is not that distasteful to you afterall?

johnw
02-11-2013, 04:36 PM
No one has, but it seems a valid question to ask when no one sees any problem with deficits at these levels being funded by the creation of new money (which I may add is a very regressive tax in the long term).

Actually, I think that's a myth. Inflation is worse for savers than debtors, and the poor save less than the rich.

peb
02-11-2013, 04:43 PM
Actually, I think that's a myth. Inflation is worse for savers than debtors, and the poor save less than the rich.

With the poor, I would somewhat agree, assuming their wages go up in accordance with their cost of living. But the rich are the ones who are able to escape the ravages of inflation through various means: real estate and other inflation protected investments. History shows this time and again. It is the vast middle class, dependent on pensions and other savings plans who are highly penalized through high inflation, hence it is regressive. The average guy who does everything right, ie saves money his whole life and lives within his means, he is the one who high inflation kills. It is no myth, I know personally people in Mexico who were wiped out twice in the last 30 years via peso devaluation. They are not the rich, they are the middle class.