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Tag Archives: Federal Spending

Time to Kill the “Defense Spending” Holy Cow

As you all know now, the Republicans are trying to weasel out of the Debt Ceiling Deal of which they were architects.  The Supercommittee failed both stunningly and predictably, triggering ‘sequestration’ which is just a fancy word for mandatory cuts.  As part of this sequestration both non-military discretionary and military spending are to suffer equal reductions in spending of $600B each over the next 10 years.  But the Republicans are now screaming, “we will hollow out the military, we can not let this go forward!”.  In the Senate there was introduced the “Down Payment to Protect National Security Act of 2012″ which, according to Senator Rubio’s website:

Senator Rubio joined Senators Kyl, McCain, Graham, Cornyn, and Ayotte in introducing The Down Payment to Protect National Security Act, legislation which overrides the automatic, across-the-board cuts to our nation’s defense capabilities, which are scheduled to take effect in 2013 unless Congress acts. Instead of making severe cuts to the Department of Defense that Secretary of Defense Leon Panetta has warned would be “devastating to the defense budget” and would “weaken our national defense,” This bill replaces the scheduled cuts by reducing the federal workforce and extending the current pay freeze for federal workers. By doing so, the legislation ensures the debt reduction targets laid out in the Budget Control Act are still on track to be met –without endangering our national security at a time when threats both at home and abroad remain very real.

This pretty much dead on arrival,  So the House is now putting up the Ryan Budget version 2.0, the major upgrade from 1.0 being the focusing of the ‘message’ on no military cuts as opposed to the evisceration of Medicare (which is still there).  The military is protected from cuts by savaging domestic programs.

Now my question to the GOP is, “Are you fucking kidding me ?!?!”  The Defense Department budget accounts for 20% of federal spending on paper.  If you include other security and military functions under the umbrella of defense spending you are looking at 25-30% of our budget, depending on how you count things such as Homeland Security (not to mention the US accounts for ~40% of worldwide military spending).  In the last ten years military spending has amounted to well over  6 trillion dollars … 6 … TRILLION. Yet, noooooooo, cutting this is off of the table.  It is just fine, however, to recoup all these missing savings on the backs of seniors, the poor, our transportation infrastructure, our educational infrastructure, etc.

Man oh man was Eisenhower sadly prescient ..

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Posted by on March 19, 2012 in Economy, Politics, Rant

 

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50 Economic Numbers From 2011 That Are Almost Too Crazy To Believe

From Business Insider

Here are some of the more choice ones in my opinion:

  • A staggering 48 percent of all Americans are either considered to be “low income” or are living in poverty.
  • According to author Paul Osterman, about 20 percent of all U.S. adults are currently working jobs that pay poverty-level wages.
  • If you can believe it, the median price of a home in Detroit is now just $6000
  • One study found that approximately 41 percent of all working age Americans either have medical bill problems or are currently paying off medical debt
  • The six heirs of Wal-Mart founder Sam Walton have a net worth that is roughly equal to the bottom 30 percent of all Americans combined

How are tax breaks for the wealthy, the Keystone XL pipeline, gutting environmental regulations, etc, going to help with all this?!? You can believe if you feed a pony a penny it will shit a dime, but that don’t make it so.

 

 
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Posted by on December 20, 2011 in Economy

 

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Quote of the Day

It’s really amazing what passes for media/press coverage in our world today. No wonder that people stay confused.

This is a prime example from an article in the Times. (Ooops,.. I see you’ll have to log in for the Times article. I think you can still get the gist of it from the 2 paragraphs.)

With my pick for the quote of the day in bold, at the bottom.

From Brad DeLong

It Still Amazes Me That People Actually Get Paid for Writing Things Like This…

AP:

US Debt – Money Managers’ Least Favorite Investment: Ask the people who invest billions for a living to name their favorite picks for 2012 and you’ll get a smorgasbord worthy of a holiday party: Brazilian stocks, U.S. junk bonds, and government debt from Colombia. Ask them what they dislike and they’ll name one of the top-performing investments this year: U.S. government bonds. Investors can rattle off a long list of reasons to avoid Treasurys. They pay next to nothing and are bound to plunge in value whenever interest rates begin climbing from their historically low levels. It seems nobody likes Treasurys, yet everybody keeps buying them anyway.

“Our least favorite asset is Treasurys,” said Christine Hurtsellers, chief investment officer for fixed-income at ING Investment Management during a recent press briefing. “We still have a lot, but it’s hard to make the argument for them.” It’s a tricky problem for bond-fund managers at a time when everyday Americans are trusting them with more of their savings…

Duncan Black observes:

Eschaton: Everybody Hates US Treasuries, Too Many People Are Buying Them; This article is the bond market version of “nobody goes there anymore, it’s too crowded.

Why oh why can’t we have a better press corps?

 
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Posted by on December 5, 2011 in Economy

 

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National Debt …

OK so we have all heard the numbers.  The US is $15 trillion in debt, and we are told that this comes out to ~$50,000 per person.  For you and I (this assumes there aren’t any of the 1% reading this blog) this is a big, very scary number. But this is a simple division by the population.  In reality, if a bill was to come due we would all pay a percentage based on our wealth and income.

So let’s do a little math.

The population of the US is estimated to be ~311 million, giving us the $50K number above. Now lets look at the US wealth and income distributions.  I got the numbers from Mother Jones as I had the article handy,

If we divvy up the debt by share of wealth:

The average 1% share is $1.67 million

The average 1-10% share is $206,599

The average 90% share is $14,435

If we compare this with the average incomes the results look skewed.  The bottom 90% owe roughly half of their yearly income while the top 1% owe roughly 145% of their yearly income.  This is due to the higher wealth to income ratio of higher income earners compared to lower income earners. Assuming a balanced-ish budget, we could mostly pay this down over 10 years with a 5% income surtax or over 20 years with a 2.5% surtax.  If we include corporate income the surtaxes would drop a bit more.

Another way to look at this is strictly in terms of national wealth.  The current aggregate national wealth is about $50 trillion.  So the national debt is 30% of the national wealth.  Using this as a basis, the debt would be retired if everyone paid 3% of their wealth each year for 10 years or 1.5% per year over 20 years.

These are admittedly very simplistic calculations, but what they show is that while the situation sucks, it is entirely manageable, especially if you consider the debt has been decades in the making.  In fact, simply going back to the Clinton Era tax rates would be a huge step in the right direction.  There is no reason to shred our safety net, abandon environmental regulations, labor regulation, gut schools and public services, all in the name of debt reduction.  It is a red herring we are being fed in an attempt to lead us into another gilded age.

 
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Posted by on November 30, 2011 in Economy

 

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Hmmmnnnnnn???– Where’s the ‘Magic’?

So,…. looking at this graph,…. where exactly is this ‘magic’ that’s supposed to happen when republican administrations get their hands on the US economy??

I don’t see any history of ‘magic’ from republican policy.  No ‘magical’ reductions in spending. In fact, looks like GW Bush did a ‘reverse’ magic act, and somehow increased spending. I’m sure Grover Norquist could explain.

I think that, … via a little slight-of-hand,… the ‘magic’ that happens is that in a republican administration  more money ‘magically’ ends up in the accounts of that 1% we’ve been hearing so much about lately.

And middle-class/ poor people ‘magically’ end up with much less in theirs. Amazing how that really pans out, isn’t it Grover.

(GW did a bang-up job during his stay, didn’t he?)

 
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Posted by on November 28, 2011 in Economy, Politics

 

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The GOP’s dual trigger nightmare in one graph

Looking at this graph from Ezra Klein makes me say, screw it Obama, don’t do anything – let the supercommittee cuts go through AND the Bush tax cuts expire. It is the best option presented so far …

 
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Posted by on November 25, 2011 in Economy, Politics

 

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