The state of public discourse over the deficit is completely amazing.
President Obama defends his 2012 budget proposal by saying that he's cut back on spending by making some tough choices. Republicans say there hasn't been enough cutting, and that the wrong things are being cut, like subsidies for the oil and gas industries and tax breaks for multinational corporations.
Isn't something missing there?
Rep. Raul Grijalva points out two of the most glaring things missing from most elite discussion of the budget - tax levels and military spending:
Rather than slashing LIHEAP and community grants, which didn’t cause this recession and generate more in economic activity than they cost, we have to look at the kinds of structural decisions that we’ve put off for too long. Reining in our military expenditures cannot wait forever.
Setting appropriate tax levels for the top two percent of earners, who got a break in last year’s tax package when Republicans filibustered a Democratic middle class tax cut bill, has to happen if we’re serious about fiscal responsibility.
We need to take a hard look not just at this year’s numbers or next year’s numbers, but at our entire approach to budgeting. Ending federal payouts to oil, coal and timber companies who only use them to line executives’ pockets is an excellent way to start.
We need to look at common sense ways to raise revenue for the public good and save money over the long term, not just cut assistance for low income families until there’s nothing left.
Michael Cohen at Democracy Arsenal pulls away the curtain from the myth that defense spending is being cut:
So there seems to be some argument going around that the Pentagon has engaged in some serious belt-tightening with its latest budget request. Honestly, I don't even have to read Gordon Adams take on this to know that is almost certainly not true, but the man's got the goods :
$78 billion in savings is a myth. Six billion don’t happen until 2015 and 2015, the mythical budget years, when DOD says the Army and the Marines will start to roll back part of the 92,000 person increase that happened over the last decade. Four billion comes from stretching out the schedule for the F-35 fighter, which could easily not happen. $12.5 billion comes from pocketing the White House decision to freeze civilian pay for the next three years, credit for a decision the Pentagon did not make. $41.5 billion comes from “efficiencies” in what are called “defense-wide,” a mystery the Secretary has yet to unravel. And $14 billion is a truly “magic” number. It comes from revising downward DOD’s estimates of future inflation, a hardy, perennial argument between DOD and OMB.
Ezra Klein takes thinks a step further, by pointing out that $78 billion over 10 years really ain't that big of a deal when you consider that "domestic discretionary spending -- that's education, income security, food safety, environmental protection" gets a $400 billion haircut. In all the DoD base budget, not including the wars in Iraq and Afghanistan, actually increases by 6% in 2011.
Cohen goes on to note how completely the priorities for public spending have reversed
since the decades that provided some of the greatest prosperity gains for the American middle class:
It's hard to believe that during the Truman and Eisenhower years, these presidents calculated defense spending by using the " remainder method " - namely taking tax revenues, subtracting domestic spending and whatever was left over went to the Pentagon. Now we have the exact opposite situation with military expenditures taken up an astounding and indefensible 60% of the discretionary budget. (Imagine how much a greater a health care system, education system and infrastructure we'd have if we reversed these ratios).
The remainder method? What a terrific concept.
(It would have added a useful underpinning to Annie Lowrey's thought experiment in trying to understand the US budget by reconceptualizing the enormous numbers as if they were part of a typical household budget.)
It's not as if actual military need has grown greater since those days of the Cold War, when there was an opposing superpower, numerous proxy wars, and the US was building tens of thousands of nuclear warheads.
Instead of asking the questions: what is that we want the US military to do; what military capabalities should we prioritize; how should the US military support the country's larger foreign policy goals etc . . . our defense spending decision-making begins from the starting point that we need a really big military, the Army, Navy, Air Force and Marines should get support for most of their pet weapons programs and to cut defense spending when the country is at war would be to put American security at risk.
I suppose we could try to look on the bright side. At least military Keynesianism is some kind of Keynesianism.
Without the stimulus of that public spending (even if it's funnelled through the defense industry) the economy would really be in the toilet. Hey, military Keynesianism worked for Egypt. At least until the military had to choose between its own interests and those of the political elite. One more thing to consider as the US traipses ever further down the road toward banana republicdom.