If you aren’t familiar with the F-22, it is the poster child for mismanaged weapons programs and will cost billions more than originally planned. The F-22 fighter jet, which costs $350 million per plane, has been operational since 2005 but hasn’t flown a single combat mission.
The US intelligence budget includes the Military Intelligence Program, which cost $21.5 billion in 2012, and the National Intelligence Program (NIP), which includes agencies like the CIA and NSA and which cost $53.9 billion.
The NIP budget started being publicly disclosed only in 2007, and every year since the budget has risen. But for 2012, the budget was $700 million lower than 2011.
The government only agrees to release the “top-line” or totals of the budgets, claiming that releasing any more details would provide potential adversaries (namely, American citizens) with too much information.
“Beyond the disclosure of the NIP top-line figure, there will be no other disclosures of currently classified NIP budget information because such disclosures could harm national security,” said the Director of National Intelligence James Clapper.
In fact, the intelligence community had for years said disclosing even the “top-line” numbers would be harmful to national security. And now that they have been forced to disclose that – without any harm to national security – they claim any more would be dangerous.
The real danger for them is to have their budgets talked about too publicly, especially in a political environment of cutting budgets and deficits. If the public know too much about America’s overly interventionist, abusive, extra-legal, and increasingly para-military spy agencies, they might demand cuts. Therefore, goes the thinking, as much information as possible has to be kept from them.
Without these wars, and the endless-war industrial policy, we could have done some nation-building at home. Think what $3 trillion or more would have built, in infrastructure, research and developing human capital — investments that would have more than paid for themselves in productivity, quality of life, addressing climate change and rebuilding the rungs on the ladder up. As opposed to building weapons that provide little multiplier effect once built and used, and when used in such misadventures as this will just keep adding to the red ink with little benefit. Yet it is the perfect companion for the opportunity costs of also allowing the banks to gamble away our future at the same time.Jon Talton (via azspot)
Since the late 1960s, the US government has engaged in a sleight-of-hand to hide the scale of its military spending from the American people. It has done this by adding to the federal budget the amount of money spent on Social Security, the nation’s retirement program, and Medicare, the health insurance program for the elderly and disabled. This is not a correct accounting however, because both of those programs are actually funded by a separate payroll tax paid by employees and employers, and the resulting trust funds are actually dedicated to the citizens who receive or will receive benefits from the programs. Using that fraud, the government and the politicians are able to claim that the US ‘only’ spends 24% of the budget on military. Even that would be far above what is spent by any other nation in the world, but it is actually only half of what the US really spends as a share of its general budget.The US is the World’s Biggest War-Monger
More mega-blackouts are likely because hundreds of discrete local electric systems are being connected into three major electric grids—East, West, and Texas—that are more vulnerable to the massive shutdowns we saw in 2003.
Compounding this, the corporate monopolies that supply two thirds of America’s electricity have fired tens of thousands of linemen and other workers whose jobs were to maintain the grid.
Under the banner of deregulation, the monopolies that supply electricity, water, gasoline, natural gas, and Internet access have been hollowing out the privately owned infrastructure on which modern life and economic activity depend. Instead of putting more into maintenance, they have slashed budgets. At the same time, they earn phenomenal profits: up to 55 percent on their assets, eight times the average for all corporations.
Corporate monopolies that own railroad bridges, hydroelectric dams, and high-pressure pipelines have skimped on taking care of this infrastructure, putting lives and property across America at unnecessary risk from blackouts, collisions, and explosions, even the threat of entire towns being washed away by bursting dams.
Republicans get to deficit spend not just because their side will sign-up happily to tax-cuts, but because their constituents believe big-time in war. And war costs a lot. Republicans will ‘sacrifice’ themselves and future generations in the name of fighting a war. Now the Dems are into war too, though not quite like the Republicans. But the Dems can’t quite convince their members that the party should spend money on any other big projects – in fact, they no longer believe it themselves.
Democratic spending is buried in the indirect incentive changes and obscure tweaks of the tax codes. But there is no ideal or purpose important enough that people are willing to say “screw it, we’ll come up with the money somehow – the sweat of our brow tomorrow, for the debts we incur today.” Revenue neutrality, offsets, CBO estimates – those are the buzzwords of Democratic fiscal policy. The dull, mind-numbing repetition of wonkspeak is not just a policy program, it is a totemic incantation, hoping to making something real out of the apparition of a party without projects.
As the Euro debate trades one nostrum for another, shifting from ‘pro-austerity’ to ‘pro-growth,’ it is worth asking ourselves what ‘austerity’ was about. After all, as Tyler Cowen and others have argued, if austerity means an absolute decline in spending, then that hasn’t happened. […]
So is all this talk of austerity a ruse or rhetorical flourish? Is ‘austerity’ simply defined according to one’s economic preferences? That is sort of Cowen’s view, at least insofar as Cowen believes there is no good definition of austerity, which is why the word austerity just ends up measuring the distance between the amount of spending one thinks is correct relative to the actual amount of spending. […]
Data on overall state spending blurs together at least two distinct issues – changes in popular consumption (and expectations about that consumption) as compared with the role of the state in managing capitalism. Increases, or non-dramatic decreases, in state spending are perfectly compatible with across the board belt-tightening when it comes to popular consumption. War-time austerity, after all, is just that – sudden increases in overall state-spending, but simultaneous limitations on popular consumption.
Given the long-term trend over the twentieth century of the state’s increasing involvement in managing various aspects of capitalism, it would be very surprising if state spending dramatically declined. But it can still remain the case that the state is withdrawing from various welfare functions, or limiting its role in maintaining popular consumption – either through direct redistribution or through employment programs.
Consider, for instance, the fact that, over the same period that Cowen et al. think there have not been ‘savage cuts,’ we have seen the US, Spain and Greece cut public employment. The US government, for instance, has cut about 586,000 jobs since the recession began. As Doug Henwood pointed out a month ago (and the WSJ later agreed), state and local cuts to employment are responsible for about 1 to 1.5% of the unemployment. Put another way, were it not for cuts in public employment, the unemployment rate would be closer to 7%, not 8.5%. The Greek agreement includes cutting 15,000 jobs, despite a 22% unemployment rate. A similar story can be told for Spain. So it is worth separating discussions of austerity from overall state involvement in the economy. Spending can remain constant or even increase even as the state imposes new limits on its willingness to support popular consumption. [++]
What’s going on here? Right-wing sabotage of USPS financing, that’s what. In 2006, the Bush White House and Congress whacked the post office with the Postal Accountability and Enhancement Act—an incredible piece of ugliness requiring the agency to PRE-PAY the health care benefits not only of current employees, but also of all employees who’ll retire during the next 75 years. Yes, that includes employees who’re not yet born! No other agency and no corporation has to do this. Worse, this ridiculous law demands that USPS fully fund this seven-decade burden by 2016. Imagine the shrieks of outrage if Congress tried to slap FedEx or other private firms with such an onerous requirement. This politically motivated mandate is costing the Postal Service $5.5 billion a year—money taken right out of postage revenue that could be going to services. That’s the real source of the “financial crisis” squeez-ing America’s post offices.
But it’s not the only hocus pocus that has falsely fabricated the public perception that our mail agency is “broke.” Due to a 40-year-old accounting error, the federal Office of Personnel Management has overcharged the post office by as much as $80 billion for payments into the Civil Service Retirement System. This means that, far from being a drain on the public treasury, USPS has had billions of its sales dollars erroneously diverted into the treasury. Restore the agency’s access to its own postage money, and the impending “collapse” goes away.
One interesting and behind-the-scenes strategy of American conservatives is to starve the beast. Under the Starve the Beast strategy, conservatives embed themselves into government and cut taxes as much as possible whether they can offset the tax cuts or not. The usually articulated goal of this strategy is to force the United States government to accumulate a massive amount of debt that will eventually force it to cut back on social programs and government spending.
The first time I heard this strategy articulated, it struck me as far-fetched and risky. After all, how can you be sure the country will react to a tax-cut-induced government debt by demanding cuts in social programs. They might just as reasonably (and I would argue more reasonably) demand that the tax cuts be rolled back instead.
But I realized later that my skepticism and confusion regarding Starve the Beast comes from an incomplete explanation of the strategy. For conservatives, it really does not matter one way or another whether the end consequence of the tax cuts is reduced social spending or not. Even if the public reacts by demanding a reinstatement of the tax cuts, the well-off still benefit.
The reason why the well-off still benefit is that tax cuts that are not immediately offset force the government to borrow money. It is generally the well-off who loan the government money because they are the ones with the money to invest in government bonds. When conservatives successfully cut taxes without reducing government spending by an equal amount, what they effectively do is swap taxing the rich with borrowing from the rich. They swap tax revenue from the rich with loans from the rich.
In the long run of course, this is beneficial to rich people no matter what. Even if taxes on the rich are reinstated later in order to pay down the federal debt caused by the tax cuts, the rich still benefit. In such a case, we will be taxing the rich in order to pay back the rich, with interest of course.
So really the Starve the Beast strategy helps conservative ends no matter what. If the response to the ballooning federal debt caused by tax cuts is to destroy social programs, then conservatives win. If the response is to reinstate the taxes on the rich, then the wealthy holders of government bonds still get a payday, and conservatives win. No matter what happens then, the Starve the Beast strategy redistributes money to the rich, which is the goal of many conservatives. In that sense, it is actually quite clever, even if nefarious and unjust.
However, if he’s not cutting Pell by as much as the White House thinks, he’s cutting other things by more. But he won’t say what. Obama “imposed” the simplest of all assumptions: Equal cuts across-the-board. I think Brooks would agree that it would have been far more unfair for Obama to guess at which programs would have taken a big cut, and which programs would take a small one.
There’s a bottom line here: You can’t cut spending without cutting spending. But Ryan wants to have it both ways: He wants to get the credit for cutting spending, but he doesn’t want to have to propose specific spending cuts. Oh, and he doesn’t want anyone to extrapolate what those cuts would be, either.
Of course, even Ryan’s supporters should see the problem here. If these cuts are too unpopular to detail, then they’re going to be too unpopular to pass. If the only way to defend Ryan’s budget is to beat back any attempts to make it specific, then it’s an empty, useless document.
House Budget Committee Chairman Paul Ryan is supposed to be a brave and serious thinker. That’s how the Washington punditry treats him. Last year, the Peter Peterson gang gave Ryan a “Fiscy Award” for “leading the way in promoting fiscal responsibility and government accountability.” Politico made Representative Ryan its “health care policymaker of the year.” Ryan is a regular guest on the Sunday talk shows and he can always count on a warm reception from the very serious people.
For this reason when Representative Ryan again proposed a budget that would shrink non-defense spending outside of Social Security and health care programs to zero by 2050 the proposal deserves real attention. According to the projections of the Congressional Budget Office (Table 2), Representative Ryan’s budget would shrink the category of defense and non-defense discretionary spending, plus non-health entitlements to 3.75 percent of GDP by 2050.
Since Representative Ryan has said that he wants to keep military spending near its current level of 4.0 percent of GDP, this would leave no money to pay for the Justice Department, the Food and Drug Administration, Education, the National Institutes of Health or anything else that the government does.
A graph that purports to establish Bill Clinton and Barack Obama as the two most fiscally conservative presidents in modern history has been making its way through the blogosphere, after first originating on Century Foundation Fellow Mark Thoma’s Economist’s View blog. Thoma’s submitter explains:
Seeing the Krugman commentary comparing real government spending under Obama and Reagan made me curious about what it looks like if you express it in per capita terms? In particular, how does the Obama period compare with other presidencies in terms of penury/austerity versus spendthriftness?
Ranking since Johnson (starting in 1968), and using the first-quarter comparisons, and calculating growth under Obama through 2011Q4, Clinton is the most austere, followed by Obama. The most spendthrift are (1) Nixon-Ford, (2) Reagan, and (3) Bush II.
So, the story one frequently hears on the right about the massive expansion of government spending under Obama—and liberal profligacy in general—just doesn’t hold up to the facts. Still, there’s been some pushback from commenters wondering about the role of inflation, or whether the story changes when you divide government spending into separate categories for national defense and human resources (employment and social services, Medicare, Social Security, veterans benefits, et cetera). So here is my own version of the graph, which shows annualized growth in government spending on national defense and human resources througout the last seven presidencies, from Q1 to Q1. All of the data is from the Office of Management and Budget historical tables.
And here is annualized real growth in government spending (adjusted using a composite deflator):
No matter how you choose to look at it, the story remains essentially the same. In both graphs, Clinton and Obama stand out as the relative fiscal conservatives next to their spendthrift Republican peers. You can state whatever objections or counterfactuals you like—Reagan was fighting the Cold War, Clinton benefited from a peace dividend, Obama inherited a recession—but, as The Atlantic’s Derek Thompson points out, ”the bottom line is that it is really, truly time for the myth about Big Spender Obama to die.”
UPDATE: Thanks to Mark Thoma and Brad DeLong for retweeting my post, which helped it make the front page of Reuter’s counterparties blog.