Nations [and empires] go bankrupt for one reason. They get involved in too many wars. I don’t believe that all war can be avoided. But voluntary wars like Iraq and Afghanistan and the rapidly expanding war in Central-Eastern Africa can be avoided. Let’s bring the troops home. Let’s cut $100 Billion from the defense budget this year and see how it looks next year. I agree that the government needs to run a balanced budget. I don’t agree that it has to be balanced every year. I think after 10 years or so of extreme budget deficits under both Republicans and Democrats it is time for some belt-tightening.
Let’s start getting back to a balanced budget by simply cutting spending 5% this year, and then cutting another 5% next year, and on, until some years in the future we get to a balanced budget. We need to turn the Titanic around, we don’t need to run it into an iceberg. If we cut the budget 30% ($1,000,000,000,000) this year we would be balanced. Now subtract $1,000,000,000,000 from the current GDP and you will get a decline in one year of 7.5% in GDP. I think that would just about finish the big casino on Wall St.
note: I am just using the gross figure, ignoring the obvious 6x or 7x direct multiplier effect that such federal spending has. The loss will crush the GDP to a quarter of its value or less. (A first year loss of 50% of GDP followed by complete economic collapse for a period.)
Here’s the problem.
Both Democrats and Republicans (all politicians really) understand that even a 5% cut in Federal spending will put a big drag on the economy. Actual living standards may decline for a while until a new equilibrium is reached. Yes folks and the problem here is not for the rich or even the proverbial middle class but a decline in living standards hammers the poor and absolutely crushes the poorest.
Republicans don’t want to cut defense spending because they are hawks and also they are tied to the war industry capitalists. The Democrats don’t want to cut defense spending because many of the jobs in the war industry are union jobs, and also downsizing the military will throw hundreds of thousands more young workers into the pool of the underemployed.
I think being excessively hawkish is wrong but I acknowledge it is a valid political view. Yes, the Dems are triangulating but I acknowledge that union members deserve representation in the political process.
The only solution I can see is finding a way to convert the arms industries into peace industries, just like we need to convert prisons to colleges and universities. I am not saying that we have to disarm. I am saying that we need to downsize the war industry, and we need to make sure that these workers do not become displaced workers. We need to find work for them that is similar in compensation and of a level of dignity that is acceptable.
We are well supplied in prisons. We are still waiting for more colleges and universities. The Prison Industry must be downsized and the perverted Privatized Prison Industry must be abolished. These prison guards must somehow be found secure dignified employment somewhere as part of the deal.. Perhaps they can find good employment at a college or a university after the conversion. Perhaps they could be provided health care at the college or university medical center. Perhaps they could be given a free college education? If we really want to lower the cost of a college education we need to increase the supply of a GOOD college education. We can do this efficiently at low cost to government by converting prisons to schools.
This is a tricky situation and it is not amenable to simplistic stupid “liberal” “conservative” analysis. We have to get beyond that.
We are all in this lifeboat together. Let’s get a grip folks.
Old ideas and strategies finally fail, and new ones must be tried. That is true progress.
have a peaceful day, Bill
note: I am a debt skeptic. In other words, I am skeptical that the current US debt will ever be repaid, as I think the point of no return was crossed during the George Bush administration. But to those of you in the national governing coalition party who wish to try to turn the ship around the above is offered in good will and wishes of good fortune.