How the world can bankrupt the American war machine

[Fried Egg]

Many people around the world have complained about America's military activities since Sep 11. And most people realise that Bush has vastly increased the amount of money America spends on the military. In fact, America now spends more on it's military than all of Europe.

But America is also still fighting to stave off recession and Bush has set about stimulating an economic recovery with his recent bout of tax cuts. Indeed, America is economically a lot more vulnerable than many think.

Bush's tax cuts are quite a trick really, when you consider that he is still forcasting increases in federal expenditure (most of which is going into the military).

So how is he pulling it off? The same way that Reagan pulled off simultaneous tax cuts and spending increases in the 80's; by increasing the national debt. The American national debt exploded in the 80's (fueled by large budget deficits) and has stayed high ever since.

Nethertheless, Bush seems intent to increase that debt still further. Essentially, he is gambling on the assumption that tax revenues will rise sufficiently (due to the predicted economic growth) in order to contain the mounting debt.

But there's a problem. Americans are net borrowers. They have been since 1986 and have been getting more into more debt ever since. In order for America to keep expanding the national debt, it has become increasingly reliant on foreign investors. No doubt, the further expansion of the national debt will have to be bourne out by even more foreign investment. See here: Tax Cuts Versus Government Growth

So, how can we stop the American war machine? Simple: Stop investing in American government bonds. If foreign investors pull out of America on mass, they will have to either radically cut spending or radically increase taxation:

quote:

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Is the Tax Cut for Real?
What is Bush's record on spending? As Jeffrey Tucker and Lew Rockwell have noted, it's awful. The Bush administration inherited a federal budget of $1.86 trillion, and now proposes to spend $2.3 trillion in 2004, for a whopping 23.6 percent increase in federal spending in this short period. The Bush presidency has far outspent Clinton's in every category. As Cato's Chris Edwards says, "[B]ased on his first three budgets, President Bush is the biggest spending president in decades." To close the gap between spending and revenue, said a report commissioned by the US Treasury, would require an "immediate and permanent 66 percent across-the-board income tax increase."

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Do you think that the American people will stomach such huge tax increases as would be required to plug the wholes in their national debt? I don't think so...

[This message has been edited by Fried Egg (edited 06-20-2003 08:37 AM).]

[Death Mage]

And here I thought everyone on this board already knew that lowering taxes increses the ammount in the federal tressury, while increasing taxes reduces the ammount in the federal tressury. Hell, it's only been proven every time it's tried.

So if the problem is "the federal government doesn't have enough money", you lower taxes. In other words, by your theory, to sufficate the US federal budget, you should increase taxes.

[Fried Egg]

Death Mage

quote:

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And here I thought everyone on this board already knew that lowering taxes increses the ammount in the federal tressury, while increasing taxes reduces the ammount in the federal tressury. Hell, it's only been proven every time it's tried.

So if the problem is "the federal government doesn't have enough money", you lower taxes. In other words, by your theory, to sufficate the US federal budget, you should increase taxes.

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Increased tax revenue due to economic growth spurred by tax cuts doesn't come in immediately. The economy has got to start growing first. And meanwhile, you're ammassing budget deficits. Deficits that must be covered by increasing the national debt.

But the inclination for American people to save has been diminishing for years. If it wasn't for the willingness of foreign investors to take up these American bonds, the fed would have been forced to hike up interest rates to attract sufficient investment (which would go down lovely with so many people in debt in America). Either that or the Fed could just print more money...but that would just inflate your economy, negating the effects of the tax cuts and devaluing the dollar against other currencies (thereby driving down foreign investment still further).

You cannot rely on the foreign investor for ever (which is the only reason successive republican governments have been able to simultaneously increased spending while cutting taxes). Eventually, something's got to give.

[Pablo]

It's time we stopped blaming Bush, Congress, Republicans, Democrats, Governors and lawyers. The average citizen is so stupid that the only thing he cares about is that he pays less tax than his rich buddy. The American citizen is happy as long as he knows someone who is getting screwed worse than he is getting screwed. He doesn't care how much of his money is being stolen from him and he doesn't even care about his loss of personal liberties, as long as Bill Gates is getting hosed. He doesn't care about holding government accountable for anything and he doesn't want to know about the waste and the fraud, nor does he want to know about the government employees' unions that have a strangle hold on taxpayers.
As is usually the case, our country has exactly the government it deserves. If we were smarter, we would have a government that would be more fiscally accountable and responsible.

[casinopete]

and we "smart people" should perhaps refrain from blaming "the average citizen" as we surely have the capability to trick him into supporting a better government. fnord.

[Fried Egg]

Pablo

[Death Mage]

I also state that the problem isn't how much money is going into the government, but rather how much money is going OUT of government. And while it's usually a Democratic plan that's inflating the budget, Bush right now has been doing everything he can to "make the other side happy" (or steal their identity/take credit for their ideas/whatever other political spin you want to put on it), and that usually means letting the Democrats come up with a spending bill and then fully supporting it. (Yes, the democrats are the ones preposing all the extreme spending hikes, not Bush himself).

It's a bad move, IMHO. As I've said, tactics liek taht have been tried in other countries, and failed miserably. Becuase once you rely on that tactic to get the votes, you must KEEP using that tactic to keep the votes. Bad bad bad. We're wasting money like crazy in the government. But nobody in Congerss is gonna CUT spending any time soon, for fear of losing their jobs.

The answer may well be term limits. Once the bloatd pigs in the House and in Senate don't have to keep vying for yet another election, they can start focuing on fixing things.

Yea right.

[Fried Egg]

Death Mage

[Aarondalf]

Homer: "They let me sign checks with a rubber stamp Marge! A... rubber... stamp!"

*roflmao*

[Pablo]

[The Anonymous Sarcast]

"Bankrupt the American War Machine." Heh. That cracks me up.

The "War Machine" isn't the problem. The "War Machine", while much larger than is necessary to fulfill it's constitutional duties (the US military doesn't merely have a larger budget than all of Europe, they spend more defending Europe than Europe does; the same with Japan), only amounts to 1/7 of the federal budget. Almost the entire remaining 86% is taken up by COMPLETELY unconstitutional socialist wealth redistribution welfare programs, such as medicaid, medicare, socialist insecurity, farm subsidies, etc, and bloated regulatory agencies that destroy economic prosperity in ways that are never even seen on the government's books. For example:

- The "War Machine" budget is almost exactly the same as the Congressional Pork Budget.

- Federal spending now consumes 23% of the GDP. State and local government spending pushes this to nearly 40% of GDP.

- Federal regulation costs American industry another 10% of the GDP, an economic drag never noted in any government budget.

- State and local regulations cost another 5% of GDP in compliance.

- Every government regulator hired puts 100-200 people out of work.

- Government social programs typically put 80% or more of dollars spent to pay their own employees. For example, if you assumed that the poorest quartile of Americans should be the ones benefiting from the forced generosity of the $1.5 trillion Federal social programs budget, then every man, woman, and child in that lowest 25% is having $21,428 spent on them. Every year. By the Federal government alone. Do you think that poor family of four is recieving that $86,000? Then throw in the state and local spending on further welfare programs.

- The tax burden (implicit and explicit) on the poorest Americans is about 30% of every dollar they spend. Imagine if everything you needed suddenly cost only 70% as much.

- The tax burden (implicit and explicit) on the average federal income taxpayer is about 70% of what they earn.

- All of this government spending doesn't improve anyone's lives. It just eeks them along in desperation and dependence at the edge of poverty. It robs their budget for housing, food, clothing, and education. It robs them of the opportunity to find gainful employment or start their own business. It drives people to teen pregnancy, divorce, substance abuse, domestic violence, and crime. It robs them of their liberty, turns them into criminals, and slowly, slowly, slowly, kills them.

I fucking hate government.

[jesternl]

I don't see how government spending creates teen pregnancies though

[What if...]

If people acted exactly as we would like them to, anarchy (and most failed government forms) would work. Dictators would be nice, communism profitable, and in anarchy there would be no crime. Unfortunately, people aren't that perfect, except for people radically different from me. The American war machine, though it won't be around forever (hopefully), won't slow down for a while, because it is built (in part) on all the economics of fixing economic problems.

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O.K., so how did I screw up this time?



[This message has been edited by What if... (edited 06-20-2003 02:18 PM).]

[The Anonymous Sarcast]

Sad. Anarchy is the correct solution to the human problem precisely _because_ human beings are flawed, imperfect.

Only those who advocate government somehow believe that the people whom they annoint with the power over and resposibility for their lives will magically be the "right" people, who won't take advantage of the system for their own benefit. Because politicians and bureaucrats of cource come from a magic fairyland of sunshine and light and hence are incorruptible.

[The Anonymous Sarcast]

Oh, and the Federal government pays unwed teenage mothers $400 a month for every kid they squeeze out. Hence, government causes teenage pregnancy.

[Vinny]

A few questions for you, Sarcast.

Who would build the public roads in the Anarchy model? Would anarchy works if the country is surrounded by hostile war mongles/dictators? How do you control things such as a unified currency system? How would crime and punishments be handled?

[Vinny]

(note to read the above as curiosity, not disapproval)

[HyToFry]

there have been many threads on those subjects vinny... all in all... we would foot the bill for the roads. Just like we do now.

We just wouldn't be paying fifty guys to pay the bill for us.

[Vinny]

what about the crime & punishment system? Every man for himself? If you're a wimp, you're screw?

[Lepton]

It ends up resembling the feudal system, but as Hy said...Do not bait the dog!

[jesternl]

well Sarcast, in Holland that systenm is in use for quite a while, say Ohhh... at least 30 years I think, I could be a few years off, and it has not caused a rise in teen pregnancies. Or any kind of pregnancies for that matter

[HyToFry]

I'm pretty sure he was being sarcastic... blaming every problem of the world on government. The fact that his example had some defendibility was a nice bonus.

[Death Mage]

Pablo: Considering that the government is sending money OUT to pay for their workers, my statement that money leaving the government being the problem covers that as well.

BTW, of course we spend more than all of Europe in our "war machine". We also have more people, and land, than all of Europe! Not only that, but a lot of troops IN Europe ARE US troops. Of COURSE we'll be spending more on our military, DUH. We'd BETTER be spending mroe on our military than all of Europe! I wouldnt' expect anything less!

[extropalopakettle]

Originally posted by Fried Egg:

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So, how can we stop the American war machine?

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And, why would we want to?

[rOver]

[Death Mage]

My bad on the population side, but we still have more land etc.

[Fried Egg]

Extro

[Mikko]

I agree with you FE on the balanced budget part. It looks like people are generally more concrened about it here in Finland than in many other places. In our recent parliamentary election the Coalition (conservative party) promised tax cuts without really saying where they would take the money from and then lost the election and ended up in opposition.

This is an interesting article about the current American economical policy:
http://www.epinet.org/content.cfm?id=1387

[casinopete]

I don't think it really matters to whom we owe money. In a pinch, we can just say they were funding terrorists, and then eliminate them as an entity. No lender = no debt.

[The Anonymous Sarcast]

Bah. I don't have time for this. You all know who I am and why I quit posting. The Anonymous Sarcast only snipes. He does not engage in debate. I just wrote a big post answering all your questions and goofy crap (feudalism, good grief. **rolls eyes**), and then deleted it. It wouldn't do any good. Go back to chewing your cud and worshipping the State.

Perhaps I should call myself the Anonymous Sarcastic Sniper. Yes, that would make everything much clearer.

[Fried Egg]

Mr. Anon

Who are you talking to?

[Fried Egg]

Mikko

The problem with that article you linked to is that it focuses on the wrong things:

[Pablo]

Originally posted by Death Mage:

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Pablo: Considering that the government is sending money OUT to pay for their workers, my statement that money leaving the government being the problem covers that as well.

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I still disagree with you. Imagine the federal government being one person. New imagine that he collects the same amount of taxes that are now collected and spends the same amount that is now spent. Even with all that "government spending" we're still way better off than now, because millions more people are out working in productive private sector jobs, increasing the overall wealth and raising the average standard of living. That's why I don't think it's the amount of government spending. It's the huge number of non-productive or counter-productive people.

[This message has been edited by Pablo (edited 06-24-2003 04:02 PM).]

[Death Mage]

In practice, I'd aggree. However, the way government jobs are handled is far, *FAR* worse than anything in the private sector. It makes a huge difference.

[Pablo]

Originally posted by Fried Egg:

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I think that governments should spend less but if they want to spend more, they should be prepared to tax the population in order to pay for it.

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You make it sound as though the decision as to how much government spends rests solely with the government. Don't the people have something to say about this? "If they want to spend more..."???? When has a government ever NOT wanted to spend more?

[Samadhi]

Unfortunately, the people do have their say. Transformed through the magic of government into a thing utterly myopic and lacking of all responsibility. Every day the system becomes less and less accountable even while it becomes more and more intrusive. And yet still the people feed it as long as they get their bread and circuses. People unwilling to take accountability for their own lives have control over mine and yours. This is unconscionable and evil.

The ideals and guidelines stated in the Constitution are sublime in their simplicity and beauty. But the law of the land is not the law of the Constitution. We're way over due for a revolution.

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A One that isn't cold, is scarcely a One at all.

[Fried Egg]

Pablo

[The Anonymous Sarcast]

For all you Europeans: Enjoy.

[Samadhi]

Gods, what a clusterfuck that document is.

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A One that isn't cold, is scarcely a One at all.

[Pablo]

Originally posted by Samadhi:

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The ideals and guidelines stated in the Constitution are sublime in their simplicity and beauty. But the law of the land is not the law of the Constitution.

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Take the 14th amendment for example. It's pretty simple in explaining that no one may be discriminated against due to race. At least there's one thing we can count on, right? I mean no one, even the Supreme Court, could distort the meaning of that, right? That's the beauty of our constitution. It's clear.



[This message has been edited by Pablo (edited 06-25-2003 05:58 PM).]