November 4, 2010
-- by Dave Johnson
Let's take a look a the military budget, but using conservative framing usually aimed at Social Security. Let's see how the military budget -- currently over a trillion dollars a year if you include related programs -- compares to Social Security using this approach.
The way we understand these things matters right now because the President's "deficit" commission is supposed to issue its report on December 1. Every honest person knows that the deficit is the result of tax cuts for the rich, and huge increases in military spending. Meanwhile Social Security cannot borrow, so it cannot contribute to the deficit. But in order to avoid getting the money from where the money went -- taxing the wealthy and cutting down on the firehose of cash flowing from the Pentagon to certain vested interests -- Social Security is in line to take the fall. No matter that so many people so desperately depend on the meager amounts the program provides. Concerns like that do not seem to matter in this country anymore.
Keep in mind as you read this that Social Security has trillions of dollars saved up in a trust fund, faces no shortfall whatsoever for at least the next 25 years, and even then will have enough coming in to meet most of its obligations. This future shortfall can be fixed with a small increase in the "cap" on income that is used to calculate the amount people pay in. (That's right, you stop paying in as you make more income, so the rich pay in much, much less of their income that the rest of us.)
So here we go, a look at the military budget through Social Security eyes:
The military budget faces "imminent crisis" as revenue from the program does not meet the military outlays.
Actually, unlike Social Security the military budget has never generated revenue to pay for itself. We just pay it out of our taxes.
The military budget trust fund is "just IOUs."
Well, unlike Social Security there is no military budget trust fund. We just pay for the military budget from our taxes. (Note that income from capital gains and dividends is taxed at a very low rate; the wealthiest do not pay for the military budget at the same rate as the rest of us.)
The gap between future spending on military and revenue from the program is enormous.
This is an understatement. Even with no increase in the budget for military and related programs in just the next ten years we will pay out at least $10 trillion more on military programs than the program brings in.
The return we receive from the military program is not as great as if we just put the money into private savings accounts.
True. We receive no return from the military budget. In fact, American businesses are at a competitive disadvantage in the world because they have to shoulder their share of the military budget, while businesses in other countries do not.
The military budget is a "ponzi scheme."
A "ponzi scheme" is a system where the returns are paid from the principal or from new investors. The military budget does not pay returns at all so it is not a "ponzi scheme." (Unlike a "ponzi scheme" Social Security has run a surplus, bringing in more than it paid out, which has been invested in the trust fund.)
The military budget is unsustainable.
The military budget and related programs currently cost over a trillion dollars a year, more than is spent by all other countries on earth combined, and the country is borrowing enormous amounts to pay for that. Is this sustainable?
We should be allowed to opt-out of the military budget.
Interesting idea. Tell me more.
Posted by Dave Johnson at November 4, 2010 10:17 AM
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