Don Davis

Running Your Own Government: Why Pay the Military?

Filed By Don Davis | July 29, 2011 1:00 PM | comments

Filed in: Politics
Tags: Congress, Democrats, economic policy, election campaigns, Medicaid, Medicare, politics, Republicans, Social Security

Thumbnail image for nomoney_nohoney.jpgI have not been talking about the insanity around the debt ceiling and debt and deficit and the efforts of Republicans to drive us all off the cliff, but I am today - and I'm going to do it by allowing you to grab ahold of this problem and see for yourself just how unbelievably bad this manufactured crisis is going to be.

You will hear a lot of conversation about the consequences from others; today, however, you are going to get the chance to be both the President and the Secretary of the Treasury, and you will get to decide for yourself exactly what bills the federal government should and should not pay as the cash runs out if a deal is not made by the time borrowing authority runs out.

At that point you'll be able to see what's coming for yourself - and once you do, you won't need me to tell you what ugly is going to look like.

" state has the right to secede unless it wishes to...[and] it is the President's duty to enforce the laws, unless somebody opposes him..."

--William H. Seward, deprecating President James Buchanan's efforts to preserve the Union, as quoted in the book "Battle Cry of Freedom: The Civil War Era"

So before I go sending you off to take the reins of power, let's fill you in on a few things that you'll need to know.

If no one has explained it to you yet, the Great Big Fuss that is going on right now is set around two issues: there are those who feel that the best way to make this economy better is to ensure that the federal government is a smaller player in our economy and not running on a deficit; many of these folks feel the way to achieve this is to make immediate, drastic, cuts in federal spending.

At the same time, the United States has run up against its "debt limit". That means the US will be unable to borrow money to fund ongoing government operations, and as you'll soon see, right now we borrow a lot of the money we need to run today's government.

So if you are one of those who seeks to immediately cut federal spending, you could force that to happen by refusing to allow the federal government any more borrowing authority; the fear of what could happen after that is presumably going to force the opposition to accept any deal, no matter how draconian, just to obtain that borrowing authority.

Naturally, the bigger a hostage you're holding, the more draconian of a deal you hope you can make, and holding the "Full Faith and Credit of the United States" hostage is about as big as it gets; that's why the Republicans are pushing for everything right this very second, from the end of Medicare and Medicaid to the right to mine uranium right next door to the Grand Canyon.

So with all that in mind, let's talk money.

In the month of August, the federal government is expected to take in $172.4 billion.

There will be a mess of bills that are coming due during the month; that amount totals $306.7 billion, and that means about 44% of the bills must go unpaid.

Where's that money go?

The Big Five are interest on current debt, which must be paid to avoid a default, payments due to defense contractors, Social Security, Medicare, and Medicaid; the five of those, alone, will be just about $160 billion.

And that leaves $12.4 billion to fund everything else the Federal Government has to do.

That would include the remaining cost of supporting our several wars, the entire federal law enforcement establishment (for example, the FBI, DEA, ATF, Immigration and Customs Enforcement, the TSA, the Border Patrol, the Federal Marshals' Service and the Bureau of Prisons), the National Parks Service and the Forest Service, the Centers for Disease Control, the Weather Service...well, just about every single thing the federal government does, except the Big Five.

So that's the situation - and now it's time for you to become the boss and make the choices:

The fine folks at Bloomberg Government have created an interactive tool that allows you to point and click your way to figuring this stuff out.

You will find your spending choices, and you just click on what you want until you run out of money, which the handy bar on the left will manage for you. When the bar turns're out of money.

"...Each month, I put all my bill collectors' names in a hat, reach in, and pull out a name. That's who I pay. If you keep calling here, then your name is not going in the hat next month."

--Steve Harvey, quoted in October 2003's "Vibe" magazine

OK folks, so now you know where to go, and you know what to do, so let's make something happen.

Take this tool and use it to create a conversation about just what really is at stake, and watch the look on your friends' faces when you point out that the entire federal government is about to go out of business if Republicans have their way.

I'd tell you the looks on their faces would be priceless - but that's not true.

Absent a debt ceiling deal, the price is actually going to be about $134 billion, which is the money we're just not going to have next month, when we're not doing things like paying for the salaries of active-duty servicemembers or food inspectors or the guards out there at the Supermax.

It should be a fun time, all the way around - unless, of course, you're one of the 300 million or so of us who are gonna get screwed over by it all.

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The link to Bloomberg says page not found. Good idea to start talks though. :)

for reasons i can't explain, the link address did change; here's the correct one.

Ok Don I worked with the broad calculator. In real cuts it would be more pick and choose of individual spending but here goes.

I chose the vows and trusts our nation has extended first. Medicare, veterans, Environmental protection...those benefit society as a whole and to remove them casue's a worse climate than being poor.

Obviously we can't stop maintaining highways, coordinating airplanes, and defending our country so I kept those.

What I did cut Investment on Treasury securities. It may seem oh so bad to some and hurt our credit in the long run but one must live first before paying interest. It would not be the first time a nation could not do so and it would not be the first time a nation froze such payments to survive.

As much as I disliked cutting Defense vendor supplies that equip our troops I had to. But I had a surplus to some extend in the end that could go toward some of it.

I cut unemployment benefits. I wish I didn't have to but there was no money. Besides I think we have already drained the system of so much money by extending such benefits far longer than the system can handle. We simply can't keep every program.

I cut the education department. I know an educated nation is great for business but we functioned for a long time by just allowing states to handle it. It may eliminate a lot of special programs but at least education would still be there, just not nationally controlled.

I cut other spending. If you can't define the importance why should I fund blindly.

The last cut was the agency for international development. AS much as I believe in helping others if we can not maintain our own nation its not like we have it to give either.

This left me with 6.9 billion extra to spend towards any of the programs above that really needed it.

Like I said the interactive checklist was crude but it did show the issue. I would have much preferred an item by item list which have much better showed the analysis we really have to make. In reality I would not cut whole spending areas but certain parts.

I think the real lesson we must take is to learn to spend appropriately. Just because we have boom times does not mean spending should increase. Excess funds should have been stored for bad years and reinvested in the economy.

The real debate is how long before we realize our national government is heading toward credit counseling or bankruptcy like many average Americans are doing? The issue is simple spend within your means. Acknowledging you have mismanaged your duties is far harder. And all parties involved can share the blame.

One of the things I haven't heard anyone say is why the teabaggers are acting the way they are. They've been listening to Glenn Beck. They have been buying his gold. Gold is up. No debt compromise, stocks crash. Stocks crash, gold goes up. Seems obvious to me what their motivation is.

i would actually look deeper...and lately, i have been.

if you look back at the history of the civil war, you discover that,m in the south, there was a group of folks called "fire-eaters', and they were the most extreme supporters of slavery.

they were victims, they were, of the north and their unreasonable demands that good and decent southerners give up their antebellum life and their human property...and a lot of them weren't even slaveowners...and the descendants those same folks are today the tea party.

go look it up - the parallels are stunning.

I wish the link worked. My first step as President, with no increase in the debt ceiling, would be to cut military spending by 90%. This would involve cancellation or deferment of military contacts, immediate RIF, by as much as possible. Closure of all militry bases not needed to support the defense of the United States - this would include a return of Guantanamo Bay to Cuba, a closure of American bases in Japanese, German, Iraq. Immediate withdrawal from Afghanistan.

Sufficient personel would be maintained to transfer equipment to the United States for mothballing, to mothball in situ, or to offer for sale at reasonable prices to the Germans, Japanese and others who might like them and have no intent to attack the US.

Lyndon Johnson recognized the problem - The United States cannot afford guns *and* butter. Because of our national paranoia that dates back to Pearl Harbor, and which was exacerbated by the cold war and then by 9/11, the US has maintained an overly large military force for way too long. The time has come to choose butter, not guns. Beat our swords into plowshares.

There are some vital military forces that would not be cut, and would even find some expansion. The various special forces and any rapid response teams would have to remain intact. But we shouldn't really be spending more than enought to deal with immediate threats, with sufficient cadre in dramatically reduced divisions to be able to flesh out enough of a force to deal with *one* war within 6 months of its inception via a callout of inactive reserve. Future planning would involve "national service" (not just military) and a tie-in of a national guard/state militia/ready reserve obligation for anyone between 18-65 who wants to take advantage of the right to bear arms.

Perhaps the only force I might leave in situ would be the forces in South Korea. Unfortunately, a withdrawal there could actually cause a war.

you're going to want to think about that several times before you go cutting.

one of the unfortunate side effects of a precipitous us military "pullback" would be the initiation of several regional arms races, and you can probably imaging how the middle east would suddenly go all nuts as israel, iran, egypt, and the saudis all instantly armed up and then spread the new arms around to the "secondary" states (syria, jordan, bahrain, algeria, yemen, morocco).

china/japan/korea/russia would also go moderately nuts, and the "new" nato would presumably have to arm up just to defend themselves against russia and iran - and of course ukraine and georgia will suddenly once again be "in play".

and then there's pakistan and india...and iran and afghanistan and the other "stans" that border afghanistan to the north.

it's complicated out there, and cutting by some huge number would not be smart; that said, backing out of iraq and afghanistan gets you $120 billion a year, and it looks like winding down the "contractor war" and the "cia war" would save a lot more, even as much of those savings are today found in "black budgets" and therefore hard to quantify.

and don't forget, we already locked ourselves into trillions in future spending by virtue of the injuries that our troops suffered in these foolish wars, and there's no getting out of those costs.

one more thing...the real pressure on military spending going forward is likely to occur in the area of "equipment creep", and it works like this:

we have a ton of old, worn out equipment that we're going to have to replace soon, and, inevitably, the new equipment will have lots of new features...and it will cost a lot more than the old equipment.

a good example is found in the effort to replace the (dangerous when exposed to ieds) armored humvee with the mrap vehicle. the mrap is real hard to blow up, and it saves lots of lives...but an mrap costs about 10 times as much as a humvee, so instead of a $150,000 jeep, you're moving troops in a bomb-resistant $1.5 million vehicle.

that's always been a budget-buster, and another example is found in the effort to replace b-52 aircraft (more than 500 were originally purchased) with stealth bombers, which turned out to be so expensive we only bought 16 of 'em.

and i'm not sure what happened with that link, but the page we were talking about is located right here.

I appreciate your observations, Don. I just went to the site (the original link didn't work, and thanks for the new one) and unfortunately it didn't allow micromanagement beyond gross amounts. On the other hand, it did shockingly show me the difficulty the federal government is in because of the insanity.

Using the interactive chart without micromanagement, I would have to defer Defense vendor payments, defer military active duty pay (insane, so I checked it back in - but to the extent of savings due to a massive RIF, the rest can go into the pot for the other programs that are "cut"), defer tax refunds, cut Education, HUD, Energy, FHA, GSA, Labor, Justice, FTA, CDC and "other spending" (or actually fund these agencies in part out of the 1.7 million GSA item and the 12.8 billion for Unemployment), cut HHS grants, eliminate Homeland Security Emergency preparation and response, eliminate NASA (which is otherwise my favorite program),eliminate Agency for International Development.

With these cuts, I still seem to have 11.3 billion left over, which can also be used to partially restore *some* unemployment benefits (for thos in ther first 26 weeks of unemployment) as well as partially fund some of the cut agencies.

With this in mind, unfortunately there are a lot of things that would have to get shifted back to the states, and I am sure that many fedral agencies would have to make drastic personnel cutbacks (which would allow a cut in federal salaries that would be partly offset by an increase in unemployment benefits for those laid off).

The bottom line is that no matter what gets cut, we're likely to create an environment for an economic depression like the Great Depression. The main reason the U.S. has 'only' been suffering recessions is because of the U.S. itself being a massive employer, and because of all that military industrial complex spending that filters down into manufacturers of parts low in the food chain but who seem to be in every congressional district.

On the issue of regional arms races, etc. - The U.S. can't afford to be the world's policeman any more. If there is available funding, the U.S. should contribute something toward U.N. peacekeeping in threatened areas.

One thing I realize, though, is that Congress should be increasing the debt ceiling immediately. Period. This will allow them *time* to plan a less horrifyingly drastic reduction in the size of the federal government over the next couple of years in a gradual way.

Of course, returning tax levels to the Clinton era might be a bit helpful in limiting the damage.

The bottom line, if Congress does not act, and the President doesn't pull a stunt like taking Bill Clinton's advice to "invoke the 14th Amendment" and just raise the debt ceiling by executive order due to congressional paralysis, any "solution" that prevents default is not going to be pretty, is likely to trigger a massive depression, and will result in a shocking amount of unemployment in the federal sector.

One other thing I would cut - Congress. At least their pay and benefits. Especially the health benefits. Congress members can pay for their own @#%^& health cere out of pocket or buy themselves individual health plans out of their own salaries that would be reduced to the average wage earned by Wal-Mart employees. That might help. Two weeks ago, it might have made sense to lock them in their chambers without food or water (the Senate candy desk can only go so far) until they came up with a bill to increase the debt limit.

darksidecat | July 31, 2011 12:12 PM

The other option to cuts is, of course, raising taxes on corportations and the super rich back to the system used back in the 60s and 70s, so that giant corporations like Exxon don't end up paying $0 in taxes and billionares don't pay lower rates than school teachers.