David Rothkopf has an interesting post up in the Foreign Policy blog about the ramifications of the economic stimulus package. The bits I found interesting (in part because I haven’t heard them addressed yet):
“…since when is the right response to a financial crisis rampant fiscal irresponsibility? We may be able to avoid the consequences of our big spending for a while, but sooner or later those chickens will come home to roost in very painful ways.”
If a significant part of our problem was caused by living beyond our means (both in micro and macro terms) then should we really be pinning our hopes on a stimulus package designed to get people (and organizations…and governments) spending more than they earn? WAY more then they earn? I get the whole Keynesian thing but I’m starting to have second thoughts.
Still…it’s not all bad news. One benefit to the economy going in the tank is that we might be able to whittle our defense budget down to a realistic size.
Even under better growth scenarios than currently exist, by the end of his term, our falling tax revenues from an aging population minus our fixed entitlement costs and pre-Iraq defense spending levels leave us with no money left over for discretionary spending. So this is not going to be about saving money on funny earmarks for toilet bowl museums in East Bumfuck, Oklahoma. This is going to be about this administration embarking on the biggest defense budget cuts in post-World War II American history. Count on that. There is no other place to make big cuts.
From Kori Schake:
Even without counting the supplemental costs of the wars, we have a defense budget larger than the next 16 countries combined (14 of whom are U.S. allies), and that doesn’t seem like a cost effective strategy, especially when other essential elements of successful national security (building capacity in non-defense agencies) are underfunded.The administration billed transformation as the way it would cut defense costs: skip a generation of weapons, find ways to substitute technology for personnel-intensive tasks, and promote innovators. If a battalion now has the accurate firepower a brigade used to, we should be able to find savings. But the Administration didn’t; they continued previous weapons systems and activities while funding a parallel and ineffectual transformation effort. Despite trumpeting the success of transformation, Admiral Edmund Giambastiani, when Vice Chairman of the Joint Chiefs of Staff, couldn’t identify a single thing our military no longer needed to do because it had transformed.
Now, it’s always tough to cut back on defense spending without being subjected to claims of being a panty-waisted, terrorist loving, hard-working American hating kook but perhaps the economic crisis will allow something approaching sanity to be applied to the defense budget.