The Pain Avoidance Era Ends

Published on Economic Populist, by Numerian, (first by Michael Collins on Sun), November 21, 2010. – Linked on our blogs with Economic Populist.

… Political Inaction as an Art Form:

As a consequence, nothing really gets done. In a lament about the sadly dysfunctional political environment in Washington, two Bloomberg reporters – Peter Coy and Heidi Przybyla – wrote an opinion piece last week titled Death and Taxes – Will Washington Ever Grow Up?. The authors do a good job of laying out the competing ideas for deficit reduction, but they don’t completely capture the dysfunctionality at work here. Defense Secretary Robert Gates is quoted as describing the Simpson-Bowles proposal as “math, not strategy”, but the authors omit the more telling statement from Gates that “The truth of the matter is when it comes to the deficit, the Department of Defense is not the problem.” 

No one knows the exact size of annual military expenditures, but the published numbers show that Defense is budgeted to spend $664 billion this fiscal year, not including around $58 billion paid out to veterans as pensions, unknown amounts funneled through the CIA, the US nuclear weapons program, and anywhere from $100 billion to $400 billion in estimated interest expense based on borrowing to fund the Middle East wars (the US hasn’t paid for any of its wars with current taxes since the 1950s).

Secretary Gates has volunteered to produce $100 billion in expense reductions in his budget, but he refuses to give up these savings to the US Treasury to reduce the deficit: he wants the money to be ploughed back into other Defense programs. This is American exceptionalism applied to the micro level; American military initiatives are such an exceptional force for good in the world that the Pentagon automatically assumes its deficit spending ways are exempt from change, and that the country can continue to borrow to pay for the 9% annual growth rate in Department of Defense outlays since 2000.

If the sober, ultra-serious people who run the Defense establishment aren’t going to “grow up”, what hope is there that politicians are going to do anything about deficit spending? If you want to get elected in America you need a Ronald Reagan sunny disposition, assuring Americans that they are an exceptional people entitled to an exceptionally promising future. Everyone knows what happened to Jimmy Carter, the last national political figure to tell the American people some cold, hard truths they didn’t really want to hear. Carter is still a source of ridicule for Republican pundits.

Besides, there is a legitimate school of thought that says there is not only nothing wrong with the level of deficit spending at the moment – in fact more is needed to combat the economic depression. Paul Krugman leads this group of Keynesian economists, and he gets a lot of support from liberal voters who suspect that all this deficit concern is part of a plot by conservatives to create such gigantic debts that the country will ultimately be forced to cut back on the welfare state, especially Social Security and Medicare. Tax-loathers such as Grover Norquist have said for years that this is the conservative plan, and these people make it impossible for any Republican politician to think privately or publicly about raising taxes.

Even the  Keynesians  are  Concerned: … //

… Finally, none of this will matter in the long run without a major reform of our campaign finance system. We must get big money out of politics at the federal and state level. Please join me in urging your state legislature to vote in favor of a Constitutional amendment that limits campaign contributions to individuals who reside in the district or state of the candidate seeking funds, and which puts a $5,000 cap per individual. Campaign contributions from corporations, foundations, out of district individuals, foreigners, from special interest groups, or in the form of in-kind donations, must be forbidden by Constitutional amendment.

We are embarking on perilous times – a time of severe trial for all of us and for our country. The journey may take many years, but there is a brighter future at the end of our troubles. We can succeed if we help each other on this journey, and if your government directs resources to the most needy among us.

May God bless and keep America. (full long text).

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