Why is all the talk about cutting payments to the poor and elderly? How about cutting defense?

By Marc Jampole

 

So far, the mainstream news media and the Conservative propaganda machine both agree that the payments to the poor and elderly should be the focus of public discussions of a deal to cut government spending to go along with the almost certain increase in taxes on the ultra-wealthy and wealthy.

 

That may be changing now that 22 House members from both sides of the aisle announced that military spending should be part of the deal to avoid the fiscal cliff.

 

The dirty little not-so-secret story of the deficit we face is that military spending and historic tax cuts for the wealthy are what fueled its tremendous increase during the Bush and early Obama years.

 

Here are some facts I picked up from the Friends Committee on National Legislation, the national lobbying group for the Quakers:

•  Military spending has doubled in the last 10 years, primarily to pay for the wars in Iraq and Afghanistan.
• U.S. per capita spending on its military budget has increased by 72 percent since 1998.
• Military spending accounts for half of all the funds that Congress appropriates every year.
• The U.S. military budget accounted for nearly 48 percent of global military spending, as of 2010. U.S. presence in the world includes hundreds of military bases in Europe.

After all other wars since World War II, the nation has cut back on military spending and tended to other needs at home. The cut in military spending after the Cold War ended was called the Peace Dividend.  It is most associated with the Clinton years of economic growth and federal deficit reduction. The other thing that Clinton (and before him, Bush I) did was to raise taxes, especially on the more well-off. 

 

That increasing government revenues and spending on people instead of guns grows the economy makes sense for all except the navel-gazers brainwashed by the myth that the market is always right. The tax part is simple: rich folk save their money, whereas the government spends its money and that creates jobs. 

 

Military spending doesn’t re-circulate into the economy creating echoes of additional wealth as much as spending on people does. There is a value in investing in military technology and a lot of technological advances began in the military, but if we put the same research dollars to use on peaceful uses immediately it would make our research much more efficient. Let’s put it this way: Would you rather have our scientists and research engineers working on new bombing systems or a barrier system that keeps the shores protected from the next Sandy or Katrina without harming the environment? That’s an easy call except to the hoard of elected officials and lobbyists who feed at the trough of military contractors.

 

One thing to keep in mind is that neither party is all that serious about the deficit. It’s just a side show to make sure that we don’t go too far into downward income redistribution. The so-called fiscal cliff leads to a great reduction of the deficit, as government spending is cut and taxes are raised. Even Republicans, however, admit that if we suck too much money out of the economy to pay to the rich folk and foreign banks and governments that own our debt we’ll sink into another depression. So everyone’s a Keynesian, but no one wants to admit it.

 

The deficit was caused by low taxes on the wealthy and military spending. Those are the places to look for the money to pump into the economy while stabilizing the debt level.