Defense — an excessive expense
More than 50 years ago, President Dwight D. Eisenhower warned Americans about the military-industrial complex. He was especially qualified to issue such an advisory. As a five-star general and commander of the D-Day invasion, he was well aware of the military culture. As the nation’s 34th president (1953-1961), he witnessed the aggressive sales effort by those who provide the country’s armaments for the Pentagon.
Military commanders always desire the latest weaponry to bolster their position regardless of cost — and industrialists are eager to provide them to generate profits. This creates a great national expense even when there is no threat to the nation.
Unfortunately, Americans failed to heed Eisenhower’s warning. Over the years, the defense budget became bloated. By 2010, the $698 billion U.S. defense budget was larger than the amount spent on defense by the next 17 largest spenders combined. This group includes China, the United Kingdom, France, Russia, Japan and Germany. The U.S. defense budget is six times that of China and 11 times that of Russia.
One rationale for such an expansive defense budget is that Americans enjoyed being viewed as the global guardian. However, the increasing cost of health care has made it fiscally impossible to secure the world and provide health care for U.S. citizens. The effort to do both by increasing public debt is unsustainable. Polls have shown that Americans oppose by a substantial margin any cuts to Medicare. However, the military-industrial complex (M-I complex) is prepared for a political battle to prevent substantial cuts in the defense budget.
In the fiscal cliff debate, conservatives insisted that America has a spending problem. Any effort to solve the problem by raising taxes, they argued, would discourage the wealthy, who are job creators. President Obama has continually insisted that wealthy Americans ought to pay a bit more in taxes to relieve the financial burden on the middle class that will result from the inevitable coming austerity.
That is essentially the financial conflict confronting America. Conservatives plan to win with the backing of the M-I complex. Citizens who are just recovering from the anxiety of a possible defeat on the fiscal cliff issue must recuperate and provide political support for President Obama. In order to be effective supporters, citizens have to understand the nature of the problem.
According to the Urban Institute, an ordinary couple will pay about $109,000 into Medicare in a lifetime, but will receive $343,000 in benefits. That is a gap of $234,000. The problem in Social Security is that people are living so much longer that Social Security taxes from those working will one day be inadequate to meet the demand for payments to retirees. However, cuts to the defense budget alone will be inadequate to provide the funds to solve the problem.
While a solution to the problem is pending, the government can borrow money to pay the expenses that are not covered by tax revenue. No family and no government can indefinitely borrow to pay for operating expenses. When the debt of a government is a small percentage of the value of the goods and services produced by that country (GDP), then the government is solvent, and the interest on loans will be moderate. But when the debt owed is a high percentage of the GDP, insolvency threatens.
Some of the wealthy would like to cut taxes to the bone even if it means the elimination of the entitlements on which those of more modest means depend. Obama is assembling an administration to prevent that from happening. It is important for Americans who support the president’s view to join the battle.