How To Balance The Budget In One “Easy” Step

March 7, 2011

By Terry Smiljanich:

Even though former Vice President Dick Cheney used to say that “deficits don’t matter,” back when the Republicans were running up huge budgetary imbalances, deficit reduction is the new mantra for Republicans, Tea-Partiers, and increasing numbers of Democrats, including the President. On the chopping block are billions of dollars in cuts in domestic discretionary spending, including home heating oil subsidies for the poor, Public Broadcasting, Pell Grants, and the Environmental Protection Agency.

Accepting for a moment that such draconian cuts in the federal budget are prudent, especially when the country is trying to recover from a serious recession, isn’t there a better way to achieve this goal?

America’s Defense Budget – How Large is Large Enough?

Indeed there is. Nothing, absolutely nothing, can be accomplished in this regard without taking a very serious look at the country’s bloated defense budget. America prides itself as having the most powerful military in the world, surpassing even Imperial Rome in the hey day of its hegemony.

How powerful? Great Britain, when it controlled a global empire in the 19th Century, set a standard for itself in determining how much to spend on its military – more expenditures than the next two countries with the largest armies and navies of the world.

By contrast, America spends almost as much on its military as the combined forces of the rest of the world. Its official budget for FY2010 is $665 billion, amounting to about 47% of the world total military spending. Granted, its gross domestic product is also the largest in the world, but even that amounts to only 21% of the world total GDP.

Of that amount, $150 billion is spent on military pay, 23% of the total. The remaining 77% goes to operating expenses, and payments to private contractors.

America’s Defense Budget – How Honest Are the Figures?

To make matters even more unbalanced, the official defense budget of the United States is also an official lie. In order to make the figure seem smaller, several large ticket items are excluded from the defense budget and hidden in other departments, such as the Department of Veterans Affairs, the Department of Homeland Security, and the Department of Energy. Taking care of soldiers and arming the country with nuclear weapons apparently doesn’t count toward what we spend on defense. When all of these “off the books” expenditures are included, the total spent by the American government on its military defense is over $1 trillion, thus swamping the global defense spending of the rest of the world in a flood of American tax dollars.

A Modest Proposal For Reducing the Federal Budget

Let’s dream for a moment that it were politically feasible to seriously reduce the defense budget. We’ll be generous and say that America should scale back only a bit, so that it still outspends the next five largest military budgets in the world (China, United Kingdom, France, Russia, Germany). We could do this by cutting the defense budget in half, to about $330 billion.

What could we do with that extra $335 billion? For starters, we could:

  1. Lower taxes for the middle class;
  2. Expand, rather than contract, our expenditures on education;
  3. Increase our border security;
  4. Improve our transportation infrastructure;
  5. Expand research and development in medicine and technology;
  6. Decrease our dependence on foreign oil.

There would still be money left over for deficit cuts, but not at the expense of our domestic budget. And we’re talking serious reductions, not the fractional pennies we would save by cutting, for example, PBS.

There would be some costs, however. Thousands of federal defense employees would be laid off, but then the deficit cutters would like that prospect, right? Thousands of private contracting employees would likewise be laid off, hurting the corporate profits of a few large defense firms, but these workers would then be free to take up some of the jobs created by our increased expenditures in the private sector. A few military bases would have to be closed for sure. And finally, we would have to tell the democratically elected governments of Iraq and Afghanistan that they will have to take over responsibility for their own internal security.

Reality Rears Its Ugly Head

All in all, not a bad deal. Of course, all of this is just a pipe dream. No politician could survive the storm of protest over these defense cuts, even though America would still remain the greatest military power in the world by far. After all, it’s easier to go after PBS or home heating oil than it is to go after Lockheed Martin and Blackwater USA.