Cuts Like a Knife

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DoD - Defending the Money Since 1940

The Republicans in Congress insist on reducing the deficit with deep cuts in federal government spending rather than raising government revenues to accommodate the spending Congress has already authorized.  Now, while the insistence on spending cuts alone, with an utter refusal to consider various schemes to increase revenues, is a ludicrous ideologically-driven policy position, it is clear that, where it can be done in a manner that makes sense, spending cuts are immensely preferable to tax increases.  Taxation is an onerous, if necessary burden on people and families, and to whatever extent the government can supply the services demanded by its constituents with a lower tax regime, the better it will be for all.  While defining a budget deficit as strictly a "spending problem, not a revenue problem" is a transparent ruse that wouldn't fool a third-grader, it makes sense to examine spending closely before turning to revenue increases.

In America, however, we have huge spending programs that could be cut significantly but that are entirely off-limits to the discussion.  The largest, by far, is the Orwellian-named "Defense Budget".  We have very little to defend against.  There are no conventional military threats to the United States - the only real defense programs we actually need are the very large scale - strategic deterrence - and the very small scale - the threat posed by trans-national extremist political groups.  On the one hand, the US could maintain its strategic deterrence with something on the order of 100 nuclear warheads, divided between submarines, land-based ICBMs and cruise missiles.  On the other, terror groups are a problem best managed by intelligence agencies and law enforcement, so the military's involvement could be limited to special operations strike capabilities.

Certainly, any talk of significant reductions in defense spending are unrealistic in today's political environment, so talk of a 75% or greater reduction is pure fantasy, but it's an important exercise to think about it, as it quickly becomes apparent that it could actually be done.  Everywhere you look you see ridiculous levels of excess.  The US has 10 active nuclear-powered aircraft carriers, with three more under construction.  If the US had only three Carrier Groups, it is true that it would greatly curtail an aggressive global posture, but that would not increase the threat of attack on the United States, and other nations would take up the slack, actually contributing to the American economy with advanced weapons sales.

When you heard the talk in the recent "fiscal cliff" negotiations of a trillion dollars in spending cuts over ten years, it is helpful to realize that could be accomplished with a 100 billion dollar annual reduction in the Pentagon budget.  For that matter, fully HALF could be accomplished with 50 billion dollar annual cut, and much of the balance could be found in wasteful and pointless Homeland Security programs, from much of TSA's security theater to counter-terrorism aid to local governments.

The point is that, in the next 20 years, health care spending, particularly on the elderly, can be expected to increase to something on the order of 10% of GDP.  We can also expect a large and growing pool of permanently unemployed/unemployable people as more and more jobs are done by intelligent machines instead of humans.  As such, the current ideological resistance to a higher tax/higher services society will necessarily break down in the face of the actual consequences of life in a modern technological society. Many things that are inconceivable today will suddenly become very conceivable in the mid-term future.  It is often said that America's ongoing budget problems exist because we refuse to face the "hard choices".  Today this is mere rhetoric, but it won't be long before the real hard choices start to manifest themselves.
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