Sunday, January 31, 2010

I Just Had A Flashback

In my radical days back in the Sixties during the Vietnam War, one of the big debates was over the question of whether American could sustain supporting both guns and butter. Son of a gun, if the debate hasn't been rekindled. America's economy was in fairly decent shape back then, so I never quite understood the debate, even though I insisted we couldn't have both (I opted for butter).

Unlike the mid-Sixties, the economy today is in dreadful shape, so the guns and butter debate seems much more interesting to me, and much more critical than it was lo those many years ago. Forty-plus years of family, businesses, and budgets have made me a lot more savvy about how money works, but I was still in the "America can afford anything" mode until the issue started popping up all over the net and the print world in modern dress.

It seems to me that the relevant question is not whether we can presently support both guns and butter, but more accurately, can we continue for long to maintain our defense responsibilities while at the same time supporting the welter of Bush and Obama entitlement and social programs? I say no, and if I'm right, then as they say, "something's gotta give." For the Obamists, that's the military (and I am fully aware that Obama said the opposite in the State of the Union address, but you all know my opinion of Obama's truthfulness). For conservatives, it's the social and welfare programs that have to go. Would that it were actually that simple.

A huge portion of the federal budget (perhaps as much as 60%) is already going to programs that long pre-date both Obama and Bush. Even if Social Security and Medicare were to be completely restructured or eliminated tomorrow, the need to protect those already stuck in the system would not change appreciably. Obama's suggestion (I certainly am nowhere near ready to call it a policy) of cutting expenditures across-the-boards while exempting the military defense budget is a good, if modest idea, but it barely scratches the surface. Furthermore, the liberal-progressive wing of the Democratic Party has already gone into open rebellion over the idea of "favoring the military."

Our foreign policy and economic policy are both in disastrous shape at the current time. Don't think of the two policies as separate issues. Those two are inextricably intertwined, and Obama's policies have only made them worse. Both directly affect our military capabilities. We are deep in debt to our so-called trading partner China. We have recognized the need to assist Taiwan militarily to protect itself from the Mainland. See the connection? Our resultant foreign policy is to talk tough but cave in. And that one's obvious. China has many more interests in derailing America than just Taiwan. They laugh at any suggestion we make about meaningful action against the murderous regime in Iran. Meanwhile, the Russians are boldly proceeding with their support of Iran while inexorably bringing Ukraine and Georgia back into the Russian empire.

The portion of the federal budget set aside for discretionary military spending has been rather small for nearly four decades. Yet now we are engaged in two wars that are costing us huge sums of money (if you prefer, you can call it one war with two fronts). We can handle that now, but two years from now, that is certainly not such a sure bet. Even a loyal and realistic military expert such as General Barry R. McCaffrey is unequivocal in his opinion that "we are unlikely to achieve our political and military goals in eighteen months." So even if there are no cuts to the current military budget at all, it will be insufficient to support future operations. The options are to put more money from a weak economy into the military, or "cut and run." Neither alternative is particularly attractive.

We are now at a crossroads. Simple "freezes" on domestic social programs are a band-aid on a quickly-spreading cancer. Massive government spending on government-run and government-owned enterprises are totally counterproductive from an economics standpoint. Green energy jobs have already proven to be disastrous to employment in Spain (9 jobs lost for every 2 jobs created). Current plans for health care from the administration, however toned down and unpopular, still loom. Dependence on foreign energy supplies while preventing domestic production of readily-available resources is another foreign policy/economic policy double-whammy directly affecting our ability to pay for military expenses. This horrible confluence of guns and butter programs is grossly exacerbating the creation of a basic and structural imbalance that will lead directly to fiscal hell.

Conservative economic historian Niall Ferguson says that "if the United States succumbs to a fiscal crisis, as an increasing number of economic experts fear it may, then the entire balance of global economic power could shift." Make no mistake, that includes military power, unless "volunteer army" means the soldiers are going to work for free.

Ferguson goes on: "We are, it seems, having the fiscal policy of a world war, without the war (the current deficit is only slightly larger in relative terms than the deficit in 1942). Total debt held by the public, excluding government agencies, but including foreigners, will rise from $5.8 trillion in 2008 to $14.3 trillion in 2019--from 41% of GDP to 68%. Projecting to 2039, the federal debt held by the public will reach 91% of GDP in the low-end estimates and 215% in the Congressional Budget Office's high-end one, more than double the annual output of the entire U. S. economy." Unsustainable is hardly the word for it.

If we continue on our present course, that inevitably leads to the conclusion that the relative share of national security in the federal budget is already built into the future actions of the federal government. Given the current military "real spending" estimates, it means that our military budget will drop from the current 4% of the total to 3.2% by 2015 and to 2.6% by 2029. That future is impossibly bleak, and would make the U.S. military forces about as effective as a counter-balance to worldwide terror and empire-builders as those of Belgium.

And so Obama and the progressives get their wish. We become more like Europe. The Wall Street Journal sums it up as follows: "Among the Western Europeans, only France and the U.K. spend more than 2% of GDP on defense, supposedly the NATO-mandated minimum. Nearly everyone else is below that. Germany, the continent's largest economy, stands at 1.3%. U.S. defense spending has been above 4% of GDP since 2004, having fallen to 3% after the Cold War ended. No amount of shaming has worked on the continentals." If America's military becomes a part-time, unionized, show-army, who will protect us from the Russians, the Chinese and the Islamofascists? Europe?

The American economy is not a sidenote to military and foreign policy. It is an integral part of them. G. Tracy Mehan III, an official in the Environmental Protection Agency during the administrations of both Presidents Bush, sums it up: "Something has got to give (sound familiar?). If you fail to rein in entitlements and other federal spending, you will either have to raise taxes, squeeze out military and other discretionary spending (no more EPA?), or pile up the debt on future generations. There are a number of alternative scenarios that can play themselves out. But, absent a turnaround on spending, both mandatory as well as discretionary, it is hard to see how military preparedness comes out the winner."

I agree. Give up the butter. Switch to Brand-X margarine. The military is critical to our foreign policy, and the economy fuels them both. We have to get our financial house back in order. We must protect military readiness expenditures and get them back to a reasonable 4% to 6% of our national budget, and I don't care if that means scrapping every single new social program from now until the year 2050. There are perfectly valid arguments at the fringes of how long we should stay in Afghanistan and Iraq, and what our military policy toward them and the entire Middle East should actually be. But the simple fact remains that our military is crucial to our future and we have no way of knowing what future 9-11s are already in the offing.

Social Security reform, Medicare reform, government giveaway programs, and all the plethora of social programs and government-owned and government-run schemes must be put on the line in order to protect our ability to defend our national security and to fight future wars. Otherwise, nothing matters, and you need to start polishing up your Chinese, Russian and Arabic language skills and sweeping out your cave.


AndrewPrice said...

To me, the answer is obvious -- foster strong economic growth (you can do that in part the way I outlined in my stimulus article). The best way to pay off a debt without killing your country is to grow out of it.

Secondly, we need entitlement reform. Health care reform (genuine, not health care seizure like the Dem's want) can cut the cost of Medicare/Medicaid dramatically. We need to cut about 1/3 of government personnel, cut government pay (particularly at the top end) across the board for the rest.

We need to stop adding new programs. Cut out the inefficient one and streamline the rest -- just like a business does in a recession.

Cancel the wasteful stimulus. Get the TARP money back and stop trying to spend it again. Sell of GM and anything else we picked up.

Promote energy independence to shift more money into the American economy rather than overseas.

Free trade with our friends.

Then, focus on paying off the debt, not just on reducing the deficit.

Unknown said...

Andrew: Well, said. Shrinking government goes hand-in-hand with a growing economy.

Eliminating major government departments would be a good start. I moved over to the Republican Party in '94 largely because of the promise to eliminate the Department of Education (that didn't work out too well with Bush and the No Dummy Left Behind Kennedy schools bill).

The thrust of the article of course was where does our military fit into all this (the "guns" part), and everything that you've proposed accomplishes the goal of eliminating rancid butter while freeing up necessary funds for the military. I tried as much as possible to avoid a general discussion of the government's profligate spend-us-into-poverty programs since you already did an excellent job of addressing those issues. I was concentrating exclusively on whether we can have both guns (the military) and butter (government giveaway programs) in the face of the present and near-future economy.

And I did say "free up" rather than "give" since you and I are both fully aware that there is plenty of wasteful spending going on there as well. We also agree that our whole concept of where the military fits into future asymmetrical warfare is in need of transformation. I simply want to make sure that in the event of a major traditional shooting war, we have the funds from a healthy economy ready to go into the battle. With our current economic status, that is a near-impossibility, and without implementing your suggestions (as well as mine and a great many others), the future will only get worse.

If it helps to strengthen the "guns" benefit concept, I'll be glad to give up the Commerce Department if they'll give up the Labor Department. LOL

AndrewPrice said...

Lawhawk, I see it all as related. We need to eliminate our defecit so that we don't need foreign countries to fund our spending shortfalls. We need a strong dollar because that makes people want to own dollars, which makes them more supportive of our policies.

We need a strong economy that goes full steam ahead in the fields of R&D and technological advancement (something that doesn't happen in bad economic times).

We need to free up the government's ability to spend when necessary so that we aren't caught flat footed should we need to increase the size of the military -- right now we're broke and couldn't spend if we needed to.

Also, as you know, I advocate ending the costly wars in Iraq and Afghanistan and switching to much cheaper methods of fighting them -- public relations/propaganda, special operations forces, limited strikes, and intelligence/infiltration work.

Unknown said...

Andrew: I agree, and I thought that was what I indicated in both the body of the article and my reply to your comment. There are multiple facets to one solution--fix the economy.

I was attempting solely to point out that the guns and butter debate is one that we've been through before. I wanted to emphasize that in all the discussions of the economy, the military has been a side-issue, as if it weren't affected by the general economy, or only affected tangentially.

National defense is one of the few things which the Constitution specifically empowers Congress and the President to control. If we let the military get lost in the general national debate on the economy, we give equal standing to governmental programs which are very pointedly not provided for by the Constitution and are of dubious constitutionality in the first place. When war comes, what are we going to throw at the enemy--welfare cheese?

It is, indeed, all related. Still, many Americans don't understand some of the subtle but outrageously expensive surtaxes, hidden taxes, payroll taxes and regulatory taxes that are crippling the economy. But they sure as hell understand "if we keep spending like this, we will find ourselves unilaterally disarmed and with no substantial military, facing enemies both traditional and non-traditional who are arming themselves at a staggering rate."

Likewise, I agreed with you both then and now (and in my comment above) that the role of the traditional military will be changing, perhaps radically, in the not-too-distant future. That doesn't mean that traditional warfare will go away entirely, let alone our need for a strong and fully-armed military. I include special ops, limited strikes, and infiltration/propaganda in my general use of the word "military," but whether they are strictly in the military or funded elsewhere, they will all be destroyed with our current economic policies.

HamiltonsGhost said...

Lawhawk--That guns/butter debate is always an underlying issue, but this is the first time I've seen it get such prominence since Lyndon Johnson's era. The military has been short-changed since Johnson and the Vietnam War, and it's time to start realizing once again that without the military in some shape or form, everything else becomes irrelevant.

Unknown said...

HamiltonsGhost: It's really sort of odd, since the economy was in pretty decent shape when the guns and butter debate got started during the Vietnam War. I think that we radicals actually believed that we could sustain both in a good economy, but refused to admit it.

And besides, we still had to fund the wonderful "Great Society." Little did most of us know that the Great Society would damage the economy so badly and create a huge underclass, leading largely to many of our current economic woes and the much more realistic guns and butter debate of today.

StanH said...

Wow Lawhawk I could sense the alarm in the tone of your article.

There is no place for the military in the mind of the egalitarians. In the halls of academia for whence Barry came “moral equivalence,” arguments will protect us from our adversaries, we just don’t understand one another.

Until we cleanse the American psyche of such drivel I fear your apocalyptic article will come true. Spending is out of control, and must be reduced, if this were a company we’d be in bankruptcy court. That’s a thought? We can’t win this argument when the starting point is based on the false progressive premise that certain things are untouchable, Social Security, Medicare, Medicaid, DOE, EPA, etc, etc. Just like a business sometimes to save it you have to reorganize. For once in my life, I’m beginning to believe that this is the mood of the country, and maybe in a few election cycles we can begin to stop the insanity.

A powerful military insures our freedoms, and without it, in the real world could mean doom.

If not embrace the horror!

Unknown said...

StanH: I am pretty sure that part of my alarm is that I was so involved in the antiwar movement that I was able to see up-close and personal just how much the left hates the military for all its concepts of sacrifice, loyalty, country, honor and duty. It has been with us ever since. Although I was never antimilitary (too much military in the family), I saw the attitude all around me, and it was a contributing factor to my slow road away from the liberal/left/progressive movements.

I'm with you in sensing a distinct mood change in the public view of all things governmental. Which is why I figured it was a good time to bring up the military, since unlike all the programs you mentioned accurately, it is the one specifically addressed as a necessity in the Constitution.

StanH said...

And to think those wonderful people that surrounded you in the ‘60s are now in charge…goody!

That’s why you and the people (Horowitz, etc.) that saw these creatures first hand must tell the world, that a deal with insanity is the agreement of a fool, and the only way to purge this country of ‘60s radicalism is to shine a very bright light on their lunacy, and push back with every ounce of our American fiber. To think that Bill Ayers is on speed dial with the president…sheesh!

Another inspiring read Lawhawk!

Unknown said...

Stan: It takes a radical to catch a radical. LOL

Hey, I've got a new slogan. "You can have my butter as soon as you can get past my gun and pay for it out of your own pocket." Too long?

Monica said...

I like your slogan, LawHawk. It could totally fit on a bumper sticker (just needs smaller font).

Unknown said...

Monica: Thanks. It's not as good as my "support the right to arm bears" but it'll do for now. LOL

Writer X said...

When you consider who's running the administration and the politicians in Congress, it makes our country's financial health that much more depressing.

Unknown said...

WriterX: Omigod--don't say "depressing." Just kidding. I'm only now beginning to climb out of the funk I've been in since a year ago November. Things are bad, but good things are in the air. I'm feeling optimistic for the first time in months. Even if we don't take either house of Congress back, we'll get damned close, and the new team will be more conservative than the old. And Obama is in self-destruct mode. It's going to a good year, maybe even a great one.

Game Master Rob Adams said...

The liberals always want to either cut or freeze military spending. Have they no idea that it is the military which allows them the ability to screw the military?

Tennessee Jed said...

In my view, growing the economy is ultimately tied to globalization. I am a firm believer that for our long term survival, we must compete in a global economy. Part of the problem is that jobs will gravitate to the place with the lowest standard of living (e.g. lowest labor cost.) If we want "good" jobs, we have to encourage our citizenry to educate themselves to compete for the most valued jobs. We cannot expect to compete with, say, Fillipono's for garmet stitching, when they will accept so much less in pay.

We must go to a different tax code, one which promotes global investment and jobs here. Right now, the opposite is true.

Yes, we absolutely need a strong military, but even there, due to the size and nature of our government, there is incredible fraud and wast in Pentagon spending. We are the "big kid" of the western free world and must take that responsibility seriously, but it sure wouldn't hurt if some of the countries besides Britain and Austrailia helped out once in a while. Oh well, I beginning to blather so I'll stop.

Unknown said...

Tennessee: Exactly right. And the early steps are to reduce the horrendous influence the unions exert on every administration, particularly the current one, and repeal Sarbanes-Oxley immediately.

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