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If you are truly worried about the budget deficit, which is an idiotic thing to actually be worried about at a time of incredibly low government borrowing rates and high unemployment, the place to start would be looking at the basic outline of the federal budget. From the Center on Budget and Policy Priorities:
As you can see, our Federal budget is mostly military spending, public health care spending, and Social Security. If you really want to reduce the deficit your options are raise taxes or cut from those three. Since our tax rate is low by international and historic standard, it could be easily raise tax revenue by a modest amount.
When it comes to cuts, though, any legitimate cost benefit, efficiency or needs analysis would say radically cut the military spending is the most logical move.
The simple fact is that the United State is a nuclear power. We are a mostly geographically isolated country. We only share a border with two smaller and weaker allies. Finally, we have a well-armed and fiercely nationalist population that makes a theoretical foreign occupations a bloody nightmare.
Even if we eliminate all military spending except for the national guard, there would still be zero chance the USA would be invaded or attacked by another nation state. Achieving what should be the only real goal of our military can be done for probably about 1/40th our current spending.
Instead, we spend dramatically more than the next 10 largest militaries combined. If we decided to cap our military spending at merely twice the amount as the next largest military, we could remain by far the world’s most powerful military force and that would still cut our military spending to about third its current size. This would massively reduce overall federal spending.
There is simply no logical justification for the absurd amount we spend on “defense.” The idea regular Americans need to be part of a “shared sacrifice” to reduce the deficit is beyond absurd when we waste so much on defending ourselves from non-existent threats.
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Like our wars, Social security INSURANCE is off budget brought and paid for by us. It’s bullshit to repeat lies that it’s part of the budget , It’s not . The need to pay back what was stolen is part of the budget.
We paid our premiums , me for over 50 years in real money . The choice is more killing for the 1%ers profits or security
Very succinct and informative recap, obviously deserving of wide circulation. As regards our illustrious MSM, however…
{Crickets}
I’d change one point- “nationalistic” = I think we have been,and are being,
pushed into simply accepting authority- the 1%,Wall Street,Courts,etc.
If an invader presents us with an authority figure,many people will just
accept that. This is a consequence of being ill informed,failing to check
factual content of statements,etc
Key to point this out. That 20% number in the chart above is expressive of repayments to social security funds, not payment of benefits to beneficiaries.
Thank you for raising that issue.
When you take out Social security out of all the budget, the remaining portions grow then add in Veterans benefits , the (atomic weapons) energy department and interest on the past wars all of a sudden were spending well over 50% on the war department.
Check. We don’t need more guns. And we don’t need to cut anything like those austerity freaks in Europe. We don’t even need to raise any taxes. If we do then we have to increase spending. The simple truth is we need to continue to run a deficit, forever. That is just the way money works without a gold standard. Deficits are utterly meaningless unless there is serious inflation, which there is not. For most of our history there has always been a deficit. It is a sad thing to watch all this bullshit and hyperventilating over debt and deficits. The federal government is not like you and me or the states or Greece. It can never run out of money or go bust. There is no such thing as unsustainable. The fed can always buy anything denominated in dollars, anything at all. As the deficit comes down, unemployment will go up unless fueled by another credit bubble.someone should tell the president or his sec of the treasury or his chief economic advisor or Romney, shit anyone.
Jon, you fail to understand the most elementary fact about the U.S. military. The U.S. is a global empire and therefore must have a military presence, preferably a large one, in every country on the globe.
That’s not snark, just a statement of fact.
True that. Our military long ago stopped being a body for the national defense.
It does seem based on the available evidence our leaders follow that as a prime directive. Keep invading.
hence the point. we would not be sharing in sacrifice to pay down debts, we would be sacrificing to fund an empire but at least back in the day the empire was suppose to steal money for you not from you.
Not just invasion. Drug wars are primarily an excuse to keep large #s of U.S. troops in other countries. Then there are all those training missions, and about a hundred other excuses for the 700-1000 U.S. military bases in other countries. Why do you suppose U.S. still has bases in Germany?
200 troops recently stationed in Australia. Australia???!!! Gotta keep the Strait of Malacca open & running smoothly………
We deficit finance all of this, revenues have not kept up with benefits since about 1971, resulting in the downward trend to pure financing in 1979. If our debt isn’t valued on the world stage, our farce is ended, thus we must have the most powerful military in the world. The Russians understood this, but didn’t realize how well we were able to make the our own citizens and the rest of the world drink the koolaid.
It would be great to fix this, to stop dumping money on defense, but it would end the primacy of the dollar. (which is happening anyways) Thus we are stuck re-arranging deck chairs.
Empires eventually bankrupted their overlord. After all the looting the overlord could do, it still felt the need for control. At that point, it was mostly expense & little return.
We are wasting real resources on the military, deficit or not.
Take Social Security out of that pie graph. The Trust Fund has underwritten $3 trillion of the national debt. The general budget owes Social Security.
I think that was the year 1947 when forward deployment to Europe and Japan began.
Or was it under Admiral Mahan, who insisted that the US needed Pacific Island coaling stations for its growing navy.
Or was in Jefferson and Secretary of State Madison’s plan to take Florida from Spain if England went to war with the US.
Or was it the Confederation’s creation of the Northwest Territory on land occupied by a wide variety of Native peoples.
Bases in Europe and Japan increase recruitment. “Get a paid vacation in Europe…”
OK that justifies the Dept of the Navy. Between its surface fleet, aircraft, submarine launched nukes, 3 active and one reserve Marine Division (each twice the size of an Army division), anything it can’t tackle is going to require calling up the National Guard anyway. Except for training reservists, I don’t really see the value added for active duty Army or Air Force units.
Short version:
* slash military spending by 80%. Reduce the mission to fit that (generous) budget.
* double government spending at all levels. Most needs should be met by government with the private sector limited to what it actually does best: technology, health care providers, family farms (not agribusiness), retail and consumer goods.
* If not obvious from the previous point, single-payer health insurance. Relieve employers of the burden of health coverage.
* permanently increase the percentage of the workforce in the public sector, with good pay and benefits and union representation. This creates a stable backbone to the economy.
* triple taxes on big business and the wealthy or whatever level it takes to balance the new budget and being to pay down the accumulated debt to a reasonable level.
To accomplish this we just need to elect more and better
RepublicansDemocrats… uh, OK I got nothin’.After years of trying to communicate that Social Security is self-funding and doesn’t contribute to the budget deficit, it’s disconcerting to see Social Security, the “budget” and the “deficit” connected here in this way without further explanation. I hope that future articles on this topic will include the clarifying points made in several of the comments. Thank you.
You were on a roll until you got to that last little thing.
Corporate welfare is not part of the budget because we give them our money by reducing their taxes, doling out subsidies, and allowing offshore headquarters among other things. The enormous costs of our wars doesn’t appear on the budget either. Restricting the discussion of our national economic state to the budget is like typing on a keyboard with over half the keys stuck.
What do you think the chances are of getting either party to make other than window dressing cuts in our military force structure and cost? Not in an election year that’s pretty certain. And not in my home town with all this unemployment. After all there’s all this terrorism stuff out there.
But we can cut SSMM in the future, not our current elderly but the future cost. And we can repeal Obamacare if the supremes don’t do it. That keeps the votes of the 55 and over crowd and we hope the younger folks aren’t thinking about that just now. Besides, most people don’t really worry about health care, right? It’s about freedom to choose. Meantime, we need to reduce our deficit and all will be well with the world.
But we sure as heck don’t need to raise taxes, especially in a four years on recession, right? Obama can’t fix it after four years and now he wants to raise taxes? You’re kidding?
Think it is all snark? We are in the middle of a rock and hard place.
And this is such a whopping part of the problem. The unending meme of incorporating SS into the general budget. Even that story is a myth because goverment can always meet required spending so long as we have the resources.
I wish our liberal reporters and outlets would stop the lies and stop misleading the people. I expect this from FOX. I demand more from our intelligent reporters and media outlets.
I agree and Jon should pull this post and replace it with one that is actually correct.
also J what about DHS budget, NSA, FBI, etc where is that coming from? Is that in the all other 4%. How about foreign aid, where is that? Does that military budget include paying all those private corporations or does that come out of another budget. what was the percentage of military budget before we started two wars as i imagine it has gone up quite a bit
Too bad we don’t have any of thosse sane media folks around here. If we did, maybe we could have a sane conversation.
The republicans have played the past four years just right. They got some idiot to believe they would compromise and, in the meantime, kept this recession going. Hell, the republican party should be history. Instead they are making a strong run to take over government and install the plutocrats once and for all.
The U.S. defense budget is enormous because of what it is actually required to defend. Yes if we were to limit it’s size to what is necessary for protecting our landmass and population it could be much smaller but would not be able to carry out the bulk of it’s actual missions. America’s wealthiest 1% travel freely and have important economic interests all over the planet. These interests need to be protected very often by force of arms. Whether it’s overthrowing democratically elected governments for trying to negotiate too tough a deal with multinational resource companies or coercing foreign governments into creating better business environments by allowing lax labor and environmental regulations it all requires very expensive big stick diplomacy. The U.S. Navy’s cost just to protect the shipping lanes so American jobs can be safely exported to take advantage of rock bottom wages is more than the entire military budget of most other nations.
A democracy should decide where to spend our resources for the public good, and not about cutting the deficit. There should likely always be a deficit.
But that doesn’t mean we need to spend our money on guns. Butter is better, health care is better. Full employment is best. Well, shit, if we can get this idea why not the PTB?
For one thing there’s one and a half million service men and women who would be added to the unemployment ranks if they weren’t “needed”. Not to mention the tens of millions of Americans working for defense contractors, designing and building the ships, planes, etc.
I know, I know, they could all get jobs making solar panels.
Actually, why not. In fact some could go to geothermal, tidal, and few could assist in researching fusion as well as replacement sources where fossil fuels are used to make things like plastics.
Good point, the government is currently paying them to be in and support the military. We’d be no worse off financially if the government paid them to work at some other unproductive boondoggle.
Very disappointing to see this piece-fundamentally misleading about the nature of funding for SS-on FDL.
“I know, I know, they could all get jobs making solar panels.”
What, you think there’s no work that needs to be done in this country? No crumbling roads, decaying bridges, collapsing sewer lines? Why the hell are our best and brightest protecting Germany from the USSR while the homefront wastes away?
Social Security, Medicare, Medicaid, CHIP, and Safety Net Programs account for more than half the US budget?
Oh my.
Perhaps we can kill and maim as many americans in these unproductive energy boondoggles as we have foreigners with the military boondoggle. That should please ya.
It’s such a bummer to spend money on life affirming policies rather than shooten-up bang-bang policies. This is especially true when your ass isn’t on the line and all you need is to slap a support the troops bumper sticker on your suv.
To be clear, about 45 percent of the U.S. government is funded by individual income taxes. Another 36 percent comes from payroll taxes, while 12 percent is a corporate income tax.
Ninety-three percent of the revenue of the United States has something to do with how Americans make money. The rest is tarrifs and such.
Payroll taxes are used to fund Medicare and Social Security. Those are amounts of money taken out of paychecks before workers get paid. Individual and corporate income taxes come from tax filings that happen every April.
Payroll taxes, SS and MM could be considered pass-throughs and not listed above, but it is accurate to say they are part of the budget.
Pickup.
Mostly wrong. I’m guessing you’re a wingnut though so I’m not gonna waste my time suggesting where you can unlearn what you have learned.
Info came from the Tax Policy Center.
Perhaps you have a better source?
If you’re really interested, I’ll look to see if I can find the lecture series my friend selise provided on Modern Money Theory.
In any event, this link is Stephanie Kelton. She’s a professor and an excellent place to start in understanding monetary operations.
http://www.youtube.com/watch?v=w-8mn-we-Cc
A simple search here turned up this.
http://my.firedoglake.com/selise/tag/mmt/
The audio series, I’ll link when I get home if anyone wants it.
Well said.
Cutting benefits or raising SS taxes does not change the budget or the national Debt. If lower benefits/higher taxes result in larger SS surpluses the money is just used to finance the national debt produced by the rest of the budget. The size of the national debt does not decrease.
So why the hell are we showing Social Security as part of the budget that affects the debt?
Indeed cutting the SS payroll tax by 2% is part of the Obama con-job since this allows the hold SS finances harmless law to claim monies from the General Account to replace that tax cut’s monies, and those monies do increase the National Debt and justify this discussion including SS in the graph. Indeed I suspect this was the reason for the payroll tax cut – to justify including SS in budget deficit discussions. Of course Obama will never mention that the end of the 2% cut at the end of this year means the end of the justification for including Social Security in the discussion.
Meanwhile, while Medicare also has a dedicated tax, with Medicare the GOP failed to provide a dedicated tax to fund the drug benefit or the Doc Fix, allowing General account funds, which do affect the national debt, to fill the hole in the financing. It is hard to take the need for Single Payer Health out of the debt discussion – but Obama will approach this discussion as a need to cut the benefits the aged receive under Medicare. With, or without ACA, post the Supreme Court decision, Obama believes it’s better to screw the aged than to challenge the insurance companies and drug companies.
True – but see above and note it is not accurate to say SS affects the national debt.
Oooh, a professor.
She seems to have a strong background and is doing good work as an appointee on the Citizens’ Utility Ratepayer Board.
http://www.taxpolicycenter.org/aboutus/staff.cfm