The Budget Battle

[Pangloss]

The looming budget battle between the White House and the House of Representatives is looking really interesting. The President has attempted to grab some of the moderate mind share by adding huge cuts to his 2012 budget, but Republicans were quick to point out that the proposal doesn't even attempt to balance the budget ten years into the future, at which point the budget would have about the same deficit that it did when Bush left office! Meanwhile another $7.1 trillion would be added to the debt.

 

Of course the real problem is that most of the budget isn't even being looked at. The two sides are arguing over a few hundred billion while the deficit this year will top $1.65 trillion. Until the major players are willing to touch that third rail, it's hard to see how anything can really be resolved.

 

Some background and recent events here:

http://abcnews.go.com/Politics/obama-defends-2012-budget-addresses-deficit-tax-overhaul/story?id=12921014

 

What do you all think?

[D H]

Nobody wants to touch the second rail (DoD) either. The only rail anyone in either the legislative or administrative branches are willing to touch is the rail that carries no current whatsoever, the 12% of the budget represented by non-defense discretionary spending. Completely zeroing out non-defense discretionary spending will not even solve the deficit problem, let alone the debt problem. Even completely zeroing out all discretionary spending, including defense, will not solve the deficit problem. The only way to solve the deficit problem is to touch the third rail. That won't happen until the third rail short circuits everything.

 

Stealing from the Social Security lockbox has been, until now, the way out of the deficit / debt morass. Politicians have known for a while that trouble is in the offing because Social Security was expected to transition from having more money coming in than going out to having more money going out than coming in in 2016. Well surprise, surprise, the economic downturn moved that 2016 event to 2011. Social Security is now in the permanent deficit camp. It won't take all that long before the third rail does short circuit everything.

 

Edit

Nobody wants to touch the fourth rail (increased taxes) either. All four rails will need to be touched.

[john5746]

I'm thinking it will be political suicide for Obama to really address the deficit, but at this point, he may go down anyway. I am thinking we got Obama 8 years too late. I think he would have been good in 2000, but now the government does need to get smaller. Not saying we shouldn't invest in the country, but big new things like the rail systems, etc - maybe they need to be offset by double the cuts to even be considered. Maybe he is just playing it safe, knowing the republicans are going to cut and complain no matter what he does. But at this point, I'm calling him a one term president - unless the economy really roars back or someone like Palin is the opposition. We really need to make some major adjustments and the leader should at least try.

[D H]

We don't know what is going on behind the scenes. I am hoping that something is going on behind the scenes here. Neither party can afford to come forth on its own to touch the second rail (defense), the third rail (entitlements) or to increase taxes. All three have to be done, and this has to be a joint proposal.

[lemur]

The looming budget battle between the White House and the House of Representatives is looking really interesting. The President has attempted to grab some of the moderate mind share by adding huge cuts to his 2012 budget, but Republicans were quick to point out that the proposal doesn't even attempt to balance the budget ten years into the future, at which point the budget would have about the same deficit that it did when Bush left office! Meanwhile another $7.1 trillion would be added to the debt.

 

Of course the real problem is that most of the budget isn't even being looked at. The two sides are arguing over a few hundred billion while the deficit this year will top $1.65 trillion. Until the major players are willing to touch that third rail, it's hard to see how anything can really be resolved.

 

Some background and recent events here:

http://abcnews.go.co...ory?id=12921014

 

What do you all think?

I get the idea that the clash between liberal and conservative spending typically takes shape like this: conservatives work systematically to reduce spending. Then liberals backlash by increasing spending to a level meant to discourage conservatives from ever thinking that their cuts will make a difference. Plus, they may think something like if they raise spending high enough, they will have more room to negotiate more cuts before actually reaching the limits of their comfort zone. Then, conservatives see through these tactics and become irritated and seek to implement even further reaching cuts than the last time, to show the liberals that they won't be deterred from the project of budget-streamlining.

 

So the question is when they're ever going to go from fighting over money to actually addressing underlying economic issues like how to make sure everyone gets enough to eat and how to keep them healthy. What about the pursuit of freedom and happiness? Are they really working on ensuring sufficient flexibility in the routes individuals have available to combine economic labor with family-responsibilities, leisure, etc.? It seems like politics used to deal more in laws, such as when businesses were allowed to be open and when they had to close. Now it seems like all that gets talked about is where to spend money or cut spending. Then, the 24/7 consumer economy is left to do whatever it takes to serve the people getting money from the government. When is government going to start regulating consumption again instead of just taxation and spending?

Edited February 16, 2011 by lemur

[swansont]

I get the idea that the clash between liberal and conservative spending typically takes shape like this: conservatives work systematically to reduce spending.

 

When was the last time anyone actually reduced spending?

[Marat]

The whole budget issue is being addressed in such a surrealistically nonsensical way that it just demonstrates how substantively undemocratic America is, given that its essential political discussions are posed in ways that have so little to do with reality that the public's vote and the representatives' action are both equally meaningless.

 

First, the spending problem can only be understood in the context of the wider perspective of three issues: the level of spending, the level of debt/deficit, and the level of taxes. The current debate has been framed so as to leave taxes and any sensible perspective on government spending completely out of the picture, and in this Alice in Wonderland world nothing that anyone in Washington is saying makes any sense. I would submit that this is deliberate, since the Right knows it can only get the answers it wants if it muddies the waters.

 

If you look at American government spending in an international perspective, it is clear that America's debt arises not from too much spending -- since our spending as a percentage of GDP is so miniscule that it is inadequate for a modern state -- but from too little taxation. When you add into that picture the fact that the U.S. is still spending a ridiculous amont of the budget on the military, which is essentially all wasted money after the invention of the atomic bomb made large-scale wars senseless -- then the budget debate becomes even more unreal.

 

So look at U.S. taxation as a percentage of GDP in comparison with other major countries:

 

United States: 28% of GDP taken by the government in taxes

Canada: 34%

England: 39%

Germany: 40%

France: 46%

 

From this it is clear that if the U.S. devoted anything like the percentage of GDP to tax intake that other, 'normal' developed countries do, then the budget deficit and debt would quickly vanish to nothing. So the issue is not that spending is too high -- especially when so much is wasted on military programs out of a kind of superstitious nostalgia for pretending that it is still 1945 and tanks really add something to American power -- but that taxation is too low. This message is reinforced when we look at how cruelly inadequate American social programs for all types of vulnerable and disadvantaged people are, since we have a moral duty not to put poor people on starvation rations just to keep taxes low on billionaires -- which is the sole real goal of the Republican Party.

[D H]

So look at U.S. taxation as a percentage of GDP in comparison with other major countries:

 

United States: 28% of GDP taken by the government in taxes

Canada: 34%

England: 39%

Germany: 40%

France: 46%

That is a part of the problem.

 

However, (1) citation needed! and (2) are you comparing apples to oranges?

 

The states and the municipalities in the US also collect taxes, some of them rather significant amounts of taxes. A fair comparison would be the total tax burden in the US versus the total tax burden in those other countries. Otherwise you are indeed comparing apples to oranges.

[Pangloss]

our spending as a percentage of GDP is so miniscule that it is inadequate for a modern state

From this it is clear that if the U.S. devoted anything like the percentage of GDP to tax intake that other, 'normal' developed countries do, then the budget deficit and debt would quickly vanish to nothing.

The fact that other countries have a higher taxation level as a percentage of GDP does not equate to a factual basis for determining "normal". There's no objective right and wrong here.

 

the Right knows it can only get the answers it wants if it muddies the waters

So does the Left. President Obama is downplaying the fact that his budget won't be balanced, and talking about new spending at the same time that he's talking about cutting expenses. Seems pretty murky to me.

 

Surely we can at least agree that some Democrats support inappropriate spending programs from time to time.

[JohnB]

Two cents from the outside.

 

You could get a lot of savings by getting better bang for your buck.

 

As was pointed out long ago in the healthcare debate, you spend far more than everybody else for worse outcomes. Australia spends $1,714 per person compared to your $4,271. We have more doctors, nurses and hospital beds per 100,000 people than you do, with lower mortality and higher life expectancy. Dental and glasses are handled by private insurance, but we are looking to expand in that area.

 

So exactly what are you getting for your extra $2,500 per person per year? Nothing, except some sort of warm, fuzzy for not being as "Socialist" as we are. Well if warm fuzzies are worth the $750B every year to you then great, but don't then complain that you "need to reduce spending" or argue about which programs should be "cut". Inefficiencies like this are costing every man, woman and child in america $50 per week. Is it worth it?

 

Look at how the ROW does things and if they get a better result from a different system, then why not adopt it? chances are that you could slash Trillions off the budget and yet not "cut" a single program.

[swansont]

That is a part of the problem.

 

However, (1) citation needed! and (2) are you comparing apples to oranges?

 

The states and the municipalities in the US also collect taxes, some of them rather significant amounts of taxes. A fair comparison would be the total tax burden in the US versus the total tax burden in those other countries. Otherwise you are indeed comparing apples to oranges.

 

http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_as_percentage_of_GDP and references therein

 

It's total tax burden.

[lemur]

When was the last time anyone actually reduced spending?

I hated it when they were doing it, but I think Gingrich and the 1990s anti-Clinton GOP actually succeeded in undermining a liberal trend of believing in post-recession economics. Prior to that movement against "big government," I had the sense that people had completely bought into the belief that digitalization, recycling, etc. was re-inventing economics in a way that commodities could be endlessly (re)produced without limits. It also seemed that at that time, no one gave a thought to the economics of supply and demand that associate abundance with price-depreciation. In fact, even water (the ultimate example of a cheap abundant commodity) was getting bottled and sold for profit. People seemed to be believing at the time that money could be multiplied infinitely, like anything else digital, and that it would thus cease to be a means of constraining economic activity. Yet, at the same time, the GOP was arguing for reducing taxes and government spending as if money and commodities could indeed run out, and thus needed to be conserved. I think as a result of various GOP measures, the scarcity-driven value of money continued to increase. For example, putting limitations on public assistance sends out the message that poverty DOES exist and that people have to maintain income to stay out of poverty and prevent themselves from having to utilize public assistance. As such, people save more with the idea that they can buffer themselves against potential income-losses. Then, as economic growth responds to increasing saving, revenues and GDP actually DOES decrease.

 

I think the anti-globalization politics also contributed to this. I.e. as economic growth and IT/internet developments were so strong, people began to circulate ideologies that the growth was not generally growth of freedom and culture for everyone globally, but that it was really just Americanization of the traditional cultures of the world, who didn't need or want freedom, economic growth, or "globalization." They saw it as just more fast food and Hollywood, which they tended to despise as being culturally "thin" in contrast to their own cultural traditions, which they perceived as "deeper." At that point, there ensued a lot of anti-growth ideology in the form of anti-migration, anti-globalization, anti-Americanization, etc. As I recall, this corresponded with the dot-com stock market crash that preceded the 9/11 attacks.

 

Once the war on terror began, the goal shifted from economic growth (because growth had led to the strong anti-globalization reaction) to political/social stabilization. It had become clear that ethnic-national tensions had not become as insignificant as many had thought. At the same time, the green/conservationism movement was attempting to continue the modernization trend of the IT/digital revolution, but it was encountering resistance from those who insisted on believing that technology had to keep evolving in the direction of bigger SUVs and more materialist consumerism generally. With Obama, this materialist/consumerist movement seems to have migrated to the left with the belief that if the government invested enough money in greening, it would provide them enough money to continue to afford the high price of gas and keep the auto industry alive, along with the rest of boom-consumerism.

 

Now it seems that fiscal conservatism is returning to popularity, mainly as a backlash to high-profile government stimulus spending that was intended to normalize the idea of large amounts of capital circulating. The coming battle is going to be between actual conservation of spending and those who are just trying to reduce government spending as a means to increase private budgets and continue spending privately, with the hope of resurrecting the boom-consumerist economy that way. The thing that people don't seem to realize though, imo, is that any form of economic negativism is bound to constrain spending behavior in one way or another. You can't put out the idea that money is limited and therefore the government shouldn't tax and spend so much of it without simultaneously sending out the message that private parties should conserve spending. So the net effect of conservative government will always be conservative private spending as well.

 

This is why there was such a strong backlash against GWBush, imo, though I'm sure 10 different people would give 20 different reasons besides this for Bush's impopularity. Still, it seemed that what the Obama government wanted to (re)establish was the idea that there was such an abundance of money in circulation that there was really no reason to conserve spending publicly or privately. The problem is that no one is going to believe this as long as there is economic suffering in the world. Everyone sees poverty and non-poverty forms of deprivation and they see that it is related to resource-scarcity. Sure, there are a few people who believe that by 2020, they'll be able to drive their SUV around all day and night using only the energy from a quartz crystal, or that hydrogen has the ability to provide unlimited clean energy because it is made from water and becomes water again after it's burned; but everyone else seems to continue to not only believe that scarcity is real but they are even focussed on higher-levels of artificial scarcity, such as scarcity of elite-status, national/global population capacities, etc. So how would you expect to overcome fiscal conservatism (public and/or private) when there is so much scarcity in people's most core beliefs and perceptions of their life-worlds?

 

 

[swansont]

I hated it when they were doing it, but I think Gingrich and the 1990s anti-Clinton GOP actually succeeded in undermining a liberal trend of believing in post-recession economics.

 

I don't see where they reduced spending. I see a tiny downtick in 1986.

 

http://www.heritage.org/budgetchartbook/growth-federal-spending-revenue

[lemur]

I don't see where they reduced spending. I see a tiny downtick in 1986.

 

http://www.heritage....pending-revenue

 

Did you read my post before responding? This link only charts central-government spending. I was trying to explain that I think central-government spending is just part of a wider approach designed to influence private spending as well, and therefore the general economy. In other words, it doesn't really matter if you reduce government spending or not as long as you convince people to restrict the flow of money in other ways.

 

Likewise, the government could spend nothing but if private spending was sufficiently diversified to include everyone in the flow of money, no one would be poor and there would be no recession. What's more, public AND private spending could be zero but if people still found ways of distributing sufficient goods and services to keep everyone happy, there would be no need for money at all. However, money is desired and used as a means of controlling economic exchanges beyond voluntary transfers, which results in the general interest to maximize money-attainment and prevent losing it, which results in fiscal constraint, which results in fiscal conservatism in one form or another always affecting the flow of money and economic activities generally.

Edited February 17, 2011 by lemur

[swansont]

It seemed like a long-winded moving of the goalposts so that you wouldn't have to admit that your original claim/premise (conservatives work systematically to reduce spending) was incorrect.

[CaptainPanic]

The problem is much larger than just your government. The imbalance between expenses and income is just one of the symptoms of a much larger problem.

 

You Americans have way too many people working in jobs that do not add value to your economy.

Security, army, weapons, government, but also the millions of people employed in all kinds of financial institutions pushing money around... None of those produce any physical wealth. I think that can all be considered "overhead costs of society (link to my blog post about it)"... and when you got too much overhead, you'll go bust.

 

I think that the USA stands a chance to reduce DoD budgets, just by stopping the war on terror. Troops and armies cost a lot less if they are at home, than when they are actively fighting... but that will have a 2nd effect: there will be job losses in the weapons industry. Those people can start new businesses (weapons manufacturers employ some of the smartest minds - they can always do something else).

 

What I am trying to say is that a steady economic growth (of the real physical economy, not the Wall-street paper economy) can also increase tax income, and thereby solve the problem. But I guess that the idea that you first lose jobs before you can create new ones will be a hard one to sell in the USA.

[lemur]

It seemed like a long-winded moving of the goalposts so that you wouldn't have to admit that your original claim/premise (conservatives work systematically to reduce spending) was incorrect.

Moving the goalposts would require some bigger picture about what the purpose of "the game" is. I was trying to state my vision of the game/stakes. You have yet to do the same. But, for the record, I did answer your question by explaining how conservative policies and propaganda re-structured economic attitudes in the 1990s to reduce spending in the economy at large; but by saying this you may consider me to be "moving goalposts" because in your view government spending is the beginning and end of the question. As I explained, I don't think government spending is relevant except in terms of the effect it has on economic activity overall.

[swansont]

Moving the goalposts would require some bigger picture about what the purpose of "the game" is. I was trying to state my vision of the game/stakes. You have yet to do the same. But, for the record, I did answer your question by explaining how conservative policies and propaganda re-structured economic attitudes in the 1990s to reduce spending in the economy at large; but by saying this you may consider me to be "moving goalposts" because in your view government spending is the beginning and end of the question. As I explained, I don't think government spending is relevant except in terms of the effect it has on economic activity overall.

 

If it's not relevant to your argument (and not true to boot) then maybe you should just retract the claim that conservatives work to reduce spending.

[Marat]

Although Spain was the richest nation in the world in 1580 because of its control over much of South and Central America, it was an impoverished, weak state by 1680 because it spent so much of its wealth adorning churchs with gold leaf and endowing monasteries to recite masses for the dead -- neither of which unproductive investments created much additional wealth. In contrast, Britain was quite poor in 1580 but became the richest nation in the world by 1780 because it invested its wealth productively. America runs into the same problem, as pointed out above, by investing so much of its GDP in unproductive military hardware that is essentially equivalent to Spanish monks' masses for the souls of the dead -- but in this case the unproductive 'religious' investment is in America's religious nostalgia for the simple days of 1945 when it could rule the world by its military force, which has now become so detached from the real levers of national power that America's massive defense spending amounts to a nearly psychotic delusion. That it is regarded as a sacrosanct part of the budget in the recent budget-cutting mania just reinforces the image of America as a psychotic cherishing a delusion.

 

The plain reality as the table of GDP percentages taken by various nations in taxes posted above testifies is that the U.S. is spending way too little, rather than way too much, as another current delusion holding the American consciousness captive asserts.

 

I argued that there is a 'normal' level of taxation implicitly set by the typical GDP percentage taken in taxes by various developed nations. I call this normal because it represents the developed world's expectation of how high the government's moral duties are with respect to addressing the problems of the vulnerable, the sick, and poor in its population. During the 'Potato Famine' in Ireland in the mid-19th century, the British government did nothing and let hundreds of thousands of people die or suffer from food shortages, but this was consistent with the normal level of moral intervention expected of governments at that time. Today, the normal level of moral intervention expected by the government of a developed country includes such things as provision of public health care for all people without user fees; provision of university education without user fees, and perhaps even with a salary for all students (cf. Sweden); a guarantee of decent housing; a guarantee of a minimum living standard sufficient to make a meaningful use of liberty rights accessible to all people, etc. The U.S. fails to realize all these moral duties because it sets taxes too low for no better purpose than to allow the wealthy nearly unlimited enjoyment of luxuries and for the absurd, irrational purpose of buying useless military trinkets to serve a dream of glory long since extinguished.

[lemur]

If it's not relevant to your argument (and not true to boot) then maybe you should just retract the claim that conservatives work to reduce spending.

What? I explained exactly how conservatives generate reduced spending in the economy generally. Why are you being so discursively strategic instead of just discussing the issues?

 

Although Spain was the richest nation in the world in 1580 because of its control over much of South and Central America, it was an impoverished, weak state by 1680 because it spent so much of its wealth adorning churchs with gold leaf and endowing monasteries to recite masses for the dead -- neither of which unproductive investments created much additional wealth. In contrast, Britain was quite poor in 1580 but became the richest nation in the world by 1780 because it invested its wealth productively. America runs into the same problem, as pointed out above, by investing so much of its GDP in unproductive military hardware that is essentially equivalent to Spanish monks' masses for the souls of the dead -- but in this case the unproductive 'religious' investment is in America's religious nostalgia for the simple days of 1945 when it could rule the world by its military force, which has now become so detached from the real levers of national power that America's massive defense spending amounts to a nearly psychotic delusion. That it is regarded as a sacrosanct part of the budget in the recent budget-cutting mania just reinforces the image of America as a psychotic cherishing a delusion.

 

The plain reality as the table of GDP percentages taken by various nations in taxes posted above testifies is that the U.S. is spending way too little, rather than way too much, as another current delusion holding the American consciousness captive asserts.

 

I argued that there is a 'normal' level of taxation implicitly set by the typical GDP percentage taken in taxes by various developed nations. I call this normal because it represents the developed world's expectation of how high the government's moral duties are with respect to addressing the problems of the vulnerable, the sick, and poor in its population. During the 'Potato Famine' in Ireland in the mid-19th century, the British government did nothing and let hundreds of thousands of people die or suffer from food shortages, but this was consistent with the normal level of moral intervention expected of governments at that time. Today, the normal level of moral intervention expected by the government of a developed country includes such things as provision of public health care for all people without user fees; provision of university education without user fees, and perhaps even with a salary for all students (cf. Sweden); a guarantee of decent housing; a guarantee of a minimum living standard sufficient to make a meaningful use of liberty rights accessible to all people, etc. The U.S. fails to realize all these moral duties because it sets taxes too low for no better purpose than to allow the wealthy nearly unlimited enjoyment of luxuries and for the absurd, irrational purpose of buying useless military trinkets to serve a dream of glory long since extinguished.

The issue you don't seem to want to touch is the fact that republicanism still wants to hold onto the pre-capitalist belief that individuals can be totally responsible for their own economic welfare, whereas welfare-state approaches like Sweden have accepted capitalism as the absolute basis for all economic activity and thus totally rejected the idea of people managing their own welfare. Regardless of whether global socialism declares the US "psychotic," "delusionary," or whatever other descriptor you can come up with that assumes the correctness of the view you support, there will not cease to be a strong US resistance to centralizing economic control. You have to understand that there are many US people that cherish the value of independence above all, even though they are far from economically independent. These people will never relinquish the dream of republic, even when faced with enormous torture and humiliation (like Job in the bible). They believe they are suffering for freedom so they will go on suffering and the more their opponents chastize them for it, the more critical they will seek the flaws in those opponents (this actually happens in any situation where someone is chastized by opponents).

 

Imo, if you really want to constructively address the opposition between central economic governance and republican decentralized economics/power, you should deconstruct the distinction between centralization and decentralization. Foucault/Deleuze is the philosophical "dynamic duo" that worked on this problem in the 70s/80s. If you don't, I think you will get endless stuck in the standoff between republican decentralization and authoritarian centralization. They are fundamentally logically opposed concepts and lend themselves to unresolvable debate.

 

 

[Mr Skeptic]

What? I explained exactly how conservatives generate reduced spending in the economy generally. Why are you being so discursively strategic instead of just discussing the issues?

 

I think it was pretty clear that he meant whether they reduce government spending. I don't believe I've seen any politicians bragging about how they reduce the population's spending.

[lemur]

I think it was pretty clear that he meant whether they reduce government spending. I don't believe I've seen any politicians bragging about how they reduce the population's spending.

I don't think they brag about it, but I think it is ultimately the intent of fiscal conservatism. After all, what good is it to conserve government spending if popular spending still took off and drove the economy into hyper-inflation?

 

 

 

[Marat]

The key to the issue is that greater government power, even greater centralizing power, can in many contexts mean more personal liberty. If I live in the 'freedom' of the United States, I enjoy no liberty because I have to guard myself constantly against the prospect of going bankrupt the first time I get seriously ill. I don't have the freedom to embark on an ambitious or non-careerist academic adventure, since the economics of a non-state-supported university education system will crush me if I try it. I don't have the liberty to attempt some innovative plan with potentially risky economic side-effects for my life, since I know in advance that if it goes wrong, the government will refuse to protect me at least with the basics of human dignity through an adequate welfare system. I am, quite simply, crippled by the LACK of big government in the U.S.

[Pangloss]

Although Spain was the richest nation in the world in 1580 because of its control over much of South and Central America, it was an impoverished, weak state by 1680 because it spent so much of its wealth adorning churchs with gold leaf and endowing monasteries to recite masses for the dead -- neither of which unproductive investments created much additional wealth.

 

America runs into the same problem, as pointed out above, by investing so much of its GDP in unproductive military hardware that is essentially equivalent to Spanish monks' masses for the souls of the dead

 

Gold leaf on statues is hardly comparable to defense, which serves a direct practical purpose whether you agree with that purpose or not. (In fact, I'm not sure gold leaf on statues didn't serve a practical purpose at various points in history either, but I guess that's another discussion.)

 

By the way, military personnel and operations accounts for 64% of the US Defense budget. Buying the hardware only accounts for about 20%. (source)

 

 

The U.S. fails to realize all these moral duties because it sets taxes too low for no better purpose than to allow the wealthy nearly unlimited enjoyment of luxuries and for the absurd, irrational purpose of buying useless military trinkets to serve a dream of glory long since extinguished.

 

... while establishing both the most successful economy and the greatest example of uplifting-from-poverty in human history, and at the same time establishing a framework that allows even the humblest of its citizens to participate and blazing a trail for even more massive upliftings since and still to come.

[CaptainPanic]

Gold leaf on statues is hardly comparable to defense, which serves a direct practical purpose whether you agree with that purpose or not. (In fact, I'm not sure gold leaf on statues didn't serve a practical purpose at various points in history either, but I guess that's another discussion.)

 

By the way, military personnel and operations accounts for 64% of the US Defense budget. Buying the hardware only accounts for about 20%. (source)

... but 100% of it does not add to the real economy of the country. It's at best overhead costs. You always need a little, but too much can kill you.

 

... while establishing both the most successful economy and the greatest example of uplifting-from-poverty in human history, and at the same time establishing a framework that allows even the humblest of its citizens to participate and blazing a trail for even more massive upliftings since and still to come.

That successful economy was built in the past, when the USA did not spend the same percentage of its income on the military, on lawyers and lawsuits, on financial institutions or other useless things. That economy was built in the days that the USA actually manufactured things: Detroit made cars, Silicon Valley made computers, Boeing was (and is) the largest airplane manufacturer, etc... And the USA did so for a competitive price with superior technology. That's indeed how you build a strong economy.

 

The only way that you can build an economy is that you have an industry that makes something that starts a feedback loop: with every product you make, you can more effectively make more products for less energy and resources. An economy, in the end, is only worth what is physically constructed... So, also a Wall Street adds nothing at all. Wall Street is nothing but a massive group of people who all try to predict which industry will grow the fastest. But the combined accumulation of wealth by such investors must be compensated by a real economy somewhere on earth...

 

Or how about the huge legal system the US has? Again, it makes absolutely nothing. Again, it's good to have a few lawyers and a functioning legal system... but too much will be crippling.

 

But what's really doing the USA in is that you have all those combined. The American economy is crippled by too many people who do useless jobs.

 

... and when you realize the scale of the problem, it's sad ironic to see that huge groups of lobbyists (also a non-productive workforce) bicker over the best way to reduce spending, while they themselves are actually part of the problem: too many unproductive people.

Edited February 18, 2011 by CaptainPanic