The Bikecast Episode #50: Deficit, Debt, Keynes, and War
Given the displayed concern from our rulers about the state of national finances, one could easily believe that a great deal of thought is going into what cuts can be made to balance the budget and stabilize the national debt. Indeed, the daily news, foreign and domestic, invariably contains stories of agonizing cuts to social programs and all manner of complex machinations aimed to solve social problems in a “revenue neutral” manner.
A moment’s inspection will reveal, however, that this is intended entirely as theater. The very most basic and painless cut isn’t even considered–a cut that would not only balance the budget, but which would also extinguishing the rising and violent anger against the citizens of the United States. What is euphemistically referred to as “defense spending”–a more Orwellian label has never been conceived–could be eliminated at a savings of over 1 trillion dollars a year. Yet this across the spectrum boon isn’t even considered in all the hand-wringing over national finances.
Forgive the repetition in the show notes. These really are notes–i.e. I didn’t rework them like I sometimes do. I’m trying to get more podcasts out the door
Numbers of a certain magnitude defy human comprehension. If we believe the self-report of the government, the national debt is just above 14,000,000,000,000. The total unfunded liabilities, that is money promised in the future (social security and medicare, primarily) that exceeds “revenue” is 114,000,000,000,000.
It’s instructive that these numbers rarely, if ever, enter into the political/economic debate. It’s a laughable premise that they will ever be paid back since the debt burden is something like $250,000 per person (including newborn children) or 1 million dollars per worker.
Instead, the rulers tend to talk about the deficit, which is the amount of money that will added to the debt this year. All manner of trivial cuts are proposed and complex schemes are invented to address some social ill while remaining revenue neutral. Due to the supposed desperation of our rulers to balance the budget, even social programs are threatened with crippling cuts.
The fact that economic stability is not really an important issue to the rulers is made clear by their careful avoidance of the one single budget item that would, by itself, balance the budget and greatly increase the prospects of peace in the world.
The US military is currently protecting Western Europe from soviet invasion. Pacific nations are protected from a reemergent imperial Japan. The entire globe is under constant surveillance and is within ½ hour of a nuclear strike, should the situation warrant. 150+ nations are occupied by thousands of US bases (no other country has more than a couple, other than in support of the US occupation of Iraq and Afghanistan).
In the podcast, I hit on a couple non-budgetary advantages of eliminating military spending, like, uh, you know, not killing countless innocent human beings.
I also touch on some of the reasons that defense spending is untouchable. There’s a great writeup over at Common Dreams. According to that article, a show is being made about making military cuts, but as the author says, “Americans should not confuse that talk with reality.”
It’s also worth noting that the economic premise that government should go into debt to help the economy during troubled times and repay the debt when the economy is healthy (Keynesianism, albeit simplified) is hopelessly out-of-scope in our current situation. Every possible stimulus–0% interest rates, money creation, massive debt accumulation–must currently be applied non-stop simply to avoid collapse of the dominant financial institutions. There will be no corresponding surplus ever again–the debt will never be repaid.