Did you ever wonder why when the government decides to increase spending it happens next week but when they talk about reducing spending it’s always in budget cycles five to ten years out? Does that really make any sense?
I really only care about what they will cut in their next budget and the one after that because there is some likelihood those same elected officials will still be around to be held accountable.
The Super Committee is agonizing about reducing spending somewhere in the neighborhood of $1.2 trillion over ten years. Considering the fact that federal spending increases 8% per year and that is considered a “no growth” budget. So what are they cutting the $1.2 trillion from?
Where else in the world could that happen?
If the budget is $2.4 trillion per year in 2011, then a no growth (8%more compounded) budget for 2012 would be about $2.6 trillion; $2.81trillion for 2013, $3.02 trillion for 2014 and on up to a total of about $37 trillion over the next ten years.
Remember, that is how much cash the federal government will spend over the next ten years when they consider an 8% increase in spending a no growth budget. They say they are trying to reduce spending by $1.2 trillion during that ten year period which amounts to about 3.2% of the $37 trillion. And they are agonizing?
I’d settle for a no growth budget being a zero percent increase year over year and no cuts. If they just capped spending at $2.4 trillion per year then over ten years we would only spend $24 trillion instead of $37 trillion.
Then if you consider that the government only takes in $1.8 trillion per year at the current level and that is not subject to the 8% growth rate. Generally a revenue growth rate of 3-4% is considered good and 5% is great. Let’s assume for this simple analysis a growth in revenue of 3.5% per year over the next ten years. Revenue received totals only $21.8 trillion when compounded.
Our current national debt is about $14 trillion and without reducing spending but actually increasing spending 8% year over year and experiencing 3.5% growth in revenue each year our national debt increases by another $15 trillion to about $29 trillion.
And the Super Committee is agonizing about cutting $1.2 trillion. There is also word that they are trying to make a “really big deal” and cut $4 trillion over ten years or slightly more than 10% of the $37 trillion total.
Could this discussion be any more absurd?
We need real spending cuts not a slowing of the growth rate.
If that weren’t bad enough, consider how you react when you are elected to Congress in 2016 and someone trots out this agreement to cut spending in some future budget cycle. Do you feel obligated to cut spending or kick the can to the next guy?
What happens if no future Congresses agree to make the cuts promised in 2011? What obligation does a future Congress have to honor agreements made by the Super Committee?
In a word; NONE.
It would be a good start to adopt a budget because that would indicate that the Senate finally came to the table. It would be better if we capped spending. It would be great if we could actually reduce spending.
I’m thinking I hear a kicking sound!
No Loss for Words 
Is Slashing Defense our Best Choice?
by Steve DanaFacing the possibility of seriously cutting the Defense Budget, maybe we should think about withdrawing our military forces from bases located in foreign countries? Wouldn’t we save a bundle if we didn’t have our forces spread around the world? Considering the way many of them feel about us, pulling out seems like a win/win for everyone; right? How many of the host countries celebrate our presence on their soil?
I am not advocating that we withdraw our forces, quite to the contrary, but shouldn’t we think about it? Doesn’t it make sense that we reaffirm that assumptions regarding our national interests made many years ago have not changed? At the same time, our supposed allies can reconfirm that our presence is advantageous and desirable to them as well or maybe not.
We pay a lot to have a military presence in many of these countries which enables the host countries to allocate a much smaller portion of their own budgets for their own defense and military while substantially increasing our cost. Keep in mind that the cost is not just measured in monetary form; our military forces are made up from millions of young Americans that we ask to go in harms way to protect freedom around the world. Maybe I would feel different if our treaty partners asked their own kids to make the same sacrifice.
Since the European economy is significant, aren’t they capable of paying for their own forces? So what portion of our cost to protect their interests do they pay?
If they beefed up their own forces, couldn’t we support them from bases on American soil? And while we’re at it, who are we protecting the Europeans from? Since we already let almost every European country into the North Atlantic Treaty Organization (NATO) aren’t they all our allies now? So who is the threat? Since we didn’t let the Russians in, they must be the threat along with China since nobody else has the ability to project force significantly beyond their own borders.
Besides America, who funds NATO? Besides America, whose forces constitute the muscle of NATO? Without America, what happens to political stability in Europe if we pull out of NATO?
What happens if we give NATO a notice of intent to reduce participation over the next five or ten years?
The same questions could be asked about mutual defense treaties between America and a bunch of Asian countries like Korea, Taiwan, Japan and the Philippines.
If we closed American bases in all those foreign countries, what would happen besides our Defense Budget going down? Or, would it go down? Would the world become less safe if the United States of America did not have bases in all these places supplemented by a Navy that patrols international waters around the globe? Isn’t that an important consideration?
How would a withdrawal of American forces affect the aggressive tendencies of countries wanting to have a louder voice in international politics?
When you get right down to it, isn’t our military presence around the world the only reason things are as safe as they are? What is that worth to our allies and ultimately to our own people? Shouldn’t we be asking that question?
If our Army had not driven Iraq out of Kuwait when Saddam Hussein invaded in 1990, what would the Middle East look like today? If our troops weren’t stationed in Saudi Arabia, would Iraq have control of all their oil too? How would that affect our national strategic interests or more importantly, how would it affect our NATO allies? Would a Middle East controlled by the Muslim Brotherhood be a threat to Great Britain,France or Germany?
What would those countries have done had we held back and done nothing in 1990?
Consider the plight of Israel. If our forces were not in close proximity to that country, what do you suspect would happen to them? The fact that they are allowed to have nuclear weapons means they will put up a good fight if they are attacked, but there is not much protecting them from an increasingly hostile Middle East.
The lessons we learned over the years taught us that it is easier to defend our own shores if we maintain a presence in those foreign countries. If we prevent destabilization of our “allies” they are more likely to actually be allies.
There are good reasons for America to have presence in all these far off foreign countries, both tactical and strategic. I’ve listened to the rationale from knowledgeable retired Army officers I respect so I don’t doubt that we need to keep our forces in place, the problem is that not everyone shares my concern about the intent of many of our supposed allies and clearly many of the countries that would benefit if we failed.
So is slashing Defense our best choice as we work to balance our budget? I’m concerned that many in our own country are prepared to find out the hard way.
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