Thursday, December 19, 2013

Pentagon Spending Undermining US Economy



In fiscal year 2014, the federal government will spend around $3.8 trillion. Of that total, military spending will occupy $831 billion. This includes spending on military defense ($626.8 billion), veterans aid ($148.2 billion), foreign military aid ($14.3 billion), the war in Afghanistan ($92.3 billion) and the Department of Energy's nuclear weapons programs ($7.9 billion).

This massive sum takes into account the sequester, which forced the Pentagon to slice $52 billion from its budget for the 2014 fiscal year that began October 1.

Military spending is second only to Social Security. However, Social Security is funded by the payroll tax, which is paid by every working American.

Military spending, on the other hand, comes from the federal government's general fund. In other words, military spending comes at the expense of other domestic programs and needs.

U.S. government spending is divided into three groups: mandatory spending, discretionary spending and interest on debt.

Discretionary spending refers to the portion of the budget which goes through the annual appropriations process each year. In other words, Congress directly sets the level of spending on programs which are discretionary. Congress can choose to increase or decrease spending on any of those programs in a given year.

Military expenditures account for 57 percent of discretionary spending.

It is quite justifiable for the U.S. to have a goal of maintaining the world's most powerful military, and one that spends the most money to provide for that. However, it is not justifiable for the U.S. to grotesquely outspend not only any conceivable enemy, but essentially the rest of the world combined.

In 2012, U.S. defense spending was six times more than China, 11 times more than Russia, 27 times more than Iran and 33 times more than Israel.

In fact, the U.S. consumed 41 percent of total global military spending that year.

It's not just that the U.S. has a bigger budget and can therefore spend more. The U.S. was also in the top 10 highest spending countries as a percentage of Gross Domestic Product (GDP).

Unnecessary Pentagon spending creates fewer jobs than every other form of federal spending, including tax cuts to promote personal consumption. In fact, it destroys American jobs if the money for it comes out of our domestic economy, according to a 2011 study by the University of Massachusetts.

This study focuses on the employment effects of military spending versus alternative domestic spending priorities, in particular investments in clean energy, health care and education.

The study compared spending $1 billion on the military versus the same amount of money spent on clean energy, health care, and education, as well as for tax cuts which produce increased levels of personal consumption.

The authors concluded that $1 billion spent on each of the domestic spending priorities will create substantially more jobs within the U.S. economy than would the same $1 billion spent on the military.

The study also concludes that investments in clean energy, health care and education create a much larger number of jobs across all pay ranges, including mid-range jobs (paying between $32,000 and $64,000) and high-paying jobs (paying over $64,000).

Ultimately, all of this unnecessary military spending is bloating the federal budget, driving the deficit and piling onto our ever-expanding debt.

Admiral Mike Mullen, former chairman of the Joint Chiefs of Staff, gave Congress a very powerful warning in 2010.

"I think the biggest threat we have to our national security is our debt," the Admiral intoned.

It would be wise to heed his admonition.

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