Why We Have a Debt Problem, Part 23

By James Kwak

So, we have eleven aircraft carrier groups. No other country in the world has more than one. Everyone who has looked at the issue has agreed that we could do with fewer than eleven while still achieving our national security goals: Bush/Obama Defense Secretary Robert Gates, Obama Defense Secretary Chuck Hagel, and think tanks on the left and the right.

But apparently we can’t retire even one–even though we would save not just the annual operating costs, but most of the $4.7 billion it will cost to refurbish over the next five years. Instead, the Obama Administration has promised the Pentagon that it can simply have more money and not comply with the spending limits set in the 2011 debt ceiling agreement (and modified by Murray-Ryan).


Why? Well, legislators from states with Navy bases don’t want to reduce the Navy’s budget. More important, though, few people want to be for a smaller military–even when our military is irrationally large, given our other national priorities (healthcare, education, infrastructure, etc.). Instead of asking whether we need eleven times as many aircraft carriers as any other country, defenders insist that any reduction is a sign of weakness–conveniently overlooking the fact that we used to have fifteen carriers, and the world hasn’t ended.

The obvious underlying problem is that every line item in the budget has an interest group that wants it in there. The slightly less obvious underlying problem is that every budgetary debate is fought on its own, without regard to the tradeoffs it entails. Who is going to be against more and in favor of less? (Actually, when it comes to the military, I would, given the problems that having a super-strong military has caused us–think of Iraq, for starters–but that’s not a viable political position.)

The inability to keep more than one thing in mind at a time is a natural human limitation. How many times have you seen a meeting’s outcome be determined by the last idea that someone had, regardless of how it compared to all the ideas that came before? But it’s no way to run a country.

15 responses to “Why We Have a Debt Problem, Part 23

  1. Maybe the way to think of the military-spending dilemma is as a national jobs program of last resort. Especially in these times of painfully sluggish job growth, politicians are loathe to sacrifice THEIR base, THEIR fighter bomber project, etc., even if there are no rational grounds for them. The carrier group example that Mr. Kwak cites is but an extreme demonstration of the pervasive problem now faced. It’s not unique to the “new normal” jobless recovery, but current conditions make the hard political compromises needed to restore some semblance of fiscal sanity all the more elusive. Sadly, it is hard to imagine a positive way forward, especially without alternative sources of middle class jobs and income.

  2. But we had 11 aircraft carrier groups in 2006 also and less debt. I think what you are saying is we have more aircraft carriers than we need.

    Whether or not we have a debt problem is not clear, however, what is very clear is we have vast underutilized resources in this country, labor and otherwise.

    We also have an economics profession which is confusing everyone.

  3. Basically, what you look for in a government program is two things:

    1. $. Make that $$$$. The more the better.
    2. Longevity. What’s the point of going to all the trouble of setting up a program if you’re just going to have to gut it in the next congress. On the contrary, you don’t want cut the program, you want it to grow over time just like an investor want their dividends to grow over time.

    The key to longevity is having an effective defense that wards of would be attackers. Defense spending has a good such defense. The defense is based on fear.

    People are fearful of being attacked by another people. They’re also, relatedly, fearful that they might be weak and unable to resist an attack. It’s not that they think themselves too weak but a chain is only as strong as its weakest link. Fellow citizens might be weak link or worse: a fellow traveler: A traitor actually working for the other side.

    Defending the defense program is simply a matter of branding detractors of the program as disdainfully weak or Benedict Arnold. This line of defense is really time tested and proven effective. Hence, we have a large program that does not die: it multiply.

    It all comes down to argument and rhetoric that manipulates the primal fears in homo sapiens.

    Thanx and have a good day.

  4. Even TAXING people for not buying for-profit health insurance will NEVER cover the “derivatives” that are “toxic”.

    And pouring TRILLIONS into stuff that leaves generations with blown up and “toxic” stuff makes sense?!

    I guess the shift will be to the “personal” – Obama won’t make it to the Olympics because he must visit the Sauds to have them sign off on th ekill list:

    http://www.huffingtonpost.com/2014/02/10/drone-attack-controversy_n_4758546.html

    The discussion about “America First” as a requirement to hold public office is a discussion that is, basically, another “War and Peace” novel – but maybe not if the “deciders” are limited to 140 characters of twit….and contract out the “thinking” to 501C think tanks who “educate” with LIES and propaganda that is way stupider than the former USSR during it’s implosion “process”….

    Nihilist totalitarianism is the new “ism” – puhleeze…that took “thinking”…?!

  5. The US mothballed fleets scattered around the country could best all other nations’ navies combined. I think there are 7 mothballed aircraft carriers, not including the USS Enterprise. Bremerton, WA is particularly amazing since it has 4 super aircraft carriers lined up in a row.

  6. We spend about 4% of GDP on defense, less than half of what we spent under Eisenhower. The idea that it’s defense spending that causes our enormous debt is risible.

    But, hey, maybe we could get back down to 2%, the way it was in the 1930s. That really worked out well for the world, didn’t it.

  7. Bingo!

    Used to be the military was a jobs program, not now. Too dangerous, now it is surveillance. As an old Navy vet I recall losing two phantoms because the pilots learning to fly them were having too much fun dog fighting out at sea. Dang. Ran out of gas. Two million a bird. But that was when you could by a dam for eight million. Now those F-35s cost upwards of $300 million. (even though they can’t land on one of those 11 carrier groups. Dang, again.) Lose a couple or three F-35s and we are talking a Billion with arms and maintenance. That is two months of my state’s education budget. General Smedlely Butler got it right when he penned War Is a Racket a century ago.

    I hope you two bravehearts get a bigger megaphone and sign up with First Look. Doesn’t look like they have a Finance Section yet.

  8. Our military spending and the 1000 or so bases we maintain could be downsized with a rational debate, but that will never happen with a commercial media thats owned in several cases by military contractors. When the Syrian issue started to become a significant issue , I printed a bumper sticker that read “Bomb Tax Havens not Syrians. “Thinking about military spending and foreign bases , why not a demand that bases be located on tax havens. There are about 60 tax havens world wide. “Move Military Bases to Tax Havens” Might be a good bumper sticker. Most citizens and probably most soldiers probably don’t support tax havens which multinationals use to cheat on their taxes while the rest of us get the tax bill for their military protection.
    I once sent Simon Johnson a bumper sticker that read “Trust Me I’m a Banker.” He had quipped that he should put one on his car , so I sent him one. He apparently enjoyed it. I get them online for $3(shipping included) each at build a sign .com

  9. Pat, you simply can’t look at percentages to judge the true cost of the MIC. For every $ that goes to the MIC, probably another $4 goes to congressman’s local pet projects in a tit for tat battle to spend the taxpayers money. Lets face it, the people who spend the taxpayers money are complete idiots, and that is the primary reason our debt is out of control.

  10. Defense spending is just an extreme example of the political problems of dealing with our deficits and debt. Hence the ironic (and inaccurate) “Part 23.”

  11. Defense is the classic ‘public good’; non-rival and non-excludable in consumption. It has the Samuelson Seal of Approval as a legitimate source of government spending.

    Nothing like Food Stamps, Social Security, Medicare and Medicaid, which are actually the sources of our unsustainable debt.

  12. The fact that you don’t get how evil it was that there was no “Just War” discussion before Iraq, Paddy, means that anything else coming from your brain is nothing but muddy toxic sludge from a polluted River of DeNile (AKA Gowanus Creek)

    Go ahead and cut off everything human beings earned as a right – how to keep their skin suit alive THROUGH HONEST WORK…and spend it all on drones, spy centers, and lawyers retroactively writing laws making it all “legal”…

    No one is against “defense” – and you’ll figure that out soon enough…

  13. It’s obvious to me Pat where it is you come from. The overpaid, entitled, if it’s not believable public knowledge, then it’s not reliable, crowd. We only need the military today as a tool to get today’s desired results of yesterdays promises. The elders have always sent the youth to war over their beliefs, recall the WMD costly fiasco for one?. Right or wrong (mostly wrong), and send the bill to the taxpayers.
    Everything we do politicially and militarily, raises prices for the under classes, pushing them further into poverty and desperation as you live behind the silent guarded walls . Now that we have concocted global security concerns from the consequences of the past. We have entered a stage where the upper class gets there way come hook or crook, and since they see no way for anyone to stop it, they just use up country’s like a bowling score sheet and move on to plan their next attack (or next aid mission). And they are running out of country’s to use up too.

  14. James, of course I agree that we don’t need the military we have, and, in fact could dominate the entire world on less than 25% of it. However, the problem isn’t particularly special interests, but plutocracy generally. The bought and paid for elected officials will not vote against anything which impinges in any way on any of their major election contributors. It is large scale, wink-wink, nudge-nudge bribery, plain and simply. It’s why, for instance, Obama tells us that he is concerned with environmental issues and then goes on to support anything that the Petroleum Institute wants. But then, plutocracy is going to destroy our planet, and there’s nothing we can do about it.

  15. I’m so glad you’re back….we’ve missed you ! We need you out here.