Category Archives: Defense spending

This Isn’t Normal And We Can’t Let It Be

In 1830 the United States had a total population of 12,806,702 spread among 24 states. New York City was our largest urban area with 202,589 people, Baltimore was second with 80,620. [Cen]  There was nothing about the American economy, which lurched from crisis to crisis during the 1830s, that would cause European powers to see the US as a power player:

“During this time, English traders could not collect on their sales in America, and many of them went bankrupt. Cotton mills closed in England, and American planters saw their markets disappear. By the summer of 1837, business was paralyzed, and it was not until the early 1840s that a semblance of confidence in business was restored.” []

We’re not, obviously, in the same category as we were 180 years ago, but we aren’t on the trajectory we were following a matter of months ago.   This, for Americans, isn’t normal.  Out of the economic and social debris of the American Civil War came an industrial nation,  fully prepared to compete with European nations, far ahead of some nations in terms of industrialization, financial markets (not that we were free from speculation and its results), and growing into importance as a world leader.  After booms and busts, periods of isolationism and nativism, and two world wars the US emerged as a super-power.  By 1953 President Dwight Eisenhower could say,”Whatever America hopes to bring to pass in the world must first come to pass in the heart of America.” [NA]

Former General Eisenhower had another line which should resonate with us today: “Now I think, speaking roughly, by leadership we mean the art of getting someone else to do something that you want done because he wants to do it, not because your position of power can compel him to do it, or your position of authority.”  [NA]

A Quick Review 

Other presidents following in this tradition sought to use American leadership in this manner.  President Kennedy’s foreign policy problems were legion, but he did manage to take a step towards arms control in the Limited Test Ban Treaty.  Lyndon Johnson’s presidency is associated with the Vietnam War, however during his tenure the US negotiated the Outer Space Treaty with the Soviet Union and the Nuclear Non-Proliferation Treaty.  President Nixon followed through with the SALT talks and the ABM Treaty.  President Gerald Ford signed the Helsinki Accords.  President Carter is remembered for the Camp David Accords. President Reagan changed the SALT formula to the START format: Strategic Arms Reduction Talks, and the tension evident in 1983 ended with Reagan’s trip to Moscow toward the end of his term in office. President George H.W. Bush managed to steer a steady course when relations with China threatened to implode over Chinese reactions to popular demonstrations, and his careful commentary in the wake of the collapse of the Soviet-era regime in Germany is said to have mitigated the reaction of hardliners in Eastern Europe.  President Bill Clinton pursued what he called his Policy of Enlargement, i.e. a policy based on promoting democracy and human rights abroad.  President George Bush’s foray into Iraq has encumbered the US with several foreign policy challenges, as did Clinton’s failure to deal assertively with Rwanda, however it would be remiss to omit Bush’s initiatives to deal with global HIV/AIDS programs and treatment.  The presidency of Barack Obama included negotiations concerning climate change (Paris Accords) and the limitations on the Iranian weapons program.

However mixed the policies and results of American world leadership since the Eisenhower Administration one aspect has remained fairly constant.  Every president has sought to get someone else to do what we want because they want to do it.  This was normal American foreign policy.  Until now.

America First America Alone

The first speech was a clear signal:

“President Trump’s speech Friday will go down as one of the shorter inaugural addresses, but it will also be remembered for its populist and often dark tone.“From this day forward,” Trump said at one point, “it’s going to be only America first. America first.” Trump appears to have first used the phrase last March in an interview with The New York Times when he denied he was an isolationist. “I’m not isolationist, but I am ‘America First,’” he said. “So I like the expression. I’m ‘America First.’” [Atlantic]

He appears to understand the dark origins of the America First movement, but adds a transactional element to the implied isolationism:

“Not isolationist, but I am America First,” he said. “I like the expression.” He said he was willing to reconsider traditional American alliances if partners were not willing to pay, in cash or troop commitments, for the presence of American forces around the world. “We will not be ripped off anymore,” he said.”[NYT]

He may like the expression, but it is irrevocably associated with the infamous Lindbergh Speech delivered on September 11, 1941:

“The three most important groups who have been pressing this country toward war are the British, the Jewish and the Roosevelt administration.  Behind these groups, but of lesser importance, are a number of capitalists, Anglophiles, and intellectuals who believe that the future of mankind depends upon the domination of the British empire. Add to these the Communistic groups who were opposed to intervention until a few weeks ago, and I believe I have named the major war agitators in this country.”

Putting America First, Lindbergh rushed past the fact that the British were  blitzed in the Summer and Fall of 1940, and the Jews were the subject of Nazi genocide.  His rationale was that neither the British nor the Jews were “American” and therefore they were promoting their interests at the expense of American interests.  At the time Lindbergh delivered his speech in Des Moines the British weren’t fighting for their empire — they were fighting for their existence; and, the Jews were fighting for their lives.  Given this context, the expression “America First” should have been assigned to the great trash heap of really bad phrases, however in Trumpian terms it’s a banner to be waved in front of our adversaries, and unfortunately our allies as well.  This isn’t normal.

Normal recognizes that Article 5 of the NATO Treaty states an attack on one ally means an attack on all — no strings, no demands for payment, no second guessing — as when it was invoked after September 11, 2001 on behalf of the United States.  It is not normal to address a gathering of NATO allies and delete a reference to the article.

Normal recognizes that voluntary accords such as the Paris Climate Agreement aren’t binding, but do express the aspirations of the global community toward adopting policies and practices which do not impinge on the health of our shared planet.  It is not normal to unilaterally discard an agreement most of the changes to which (from the Kyoto version) were made at American insistence.

Normal recognizes that the deployment of U.S. forces around the world is a deterrent to adventurism and the disruption of financial and commercial functions in the global domain.  It is not normal to view these expenses as being “ripped off” by other nations.  It is truly beyond normal to decry these expenses and then advocate for a $700 billion increase in the U.S. military budget.

Normal recognizes that not everyone gets exactly what is wanted from any international agreement, but that small steps can often lead to greater improvements.  The SALT talks begat the START talks and the START talks begat a nuclear non-proliferation treaty.  It is not normal to demand that the treaty with Iran contain precisely what the American government wants when it wants it — without securing international agreement as to the terms of the specific treaty.

Normal recognizes that it is necessary for a nation to be perceived as cooperative and willing to be held to one’s word.  It is not normal to have allies questioning whether or not the U.S. will sustain its support for NATO, cooperate with global initiatives on trade, health, and climate change, and keep its word concerning threats to global peace.

Normal recognizes that the foreign policy of other nations, such as Russia, is not in alignment with American interests.  Normal recognizes that the creation of a “Russian Century” is not in the best interest of the United States.  It is not normal to have an American president deny or try to minimize the significance of a Russian assault on American democratic practices and institutions.   It is not normal to have an American president omit reference to what is occurring in the Crimea, in Ukraine, and along the borders of western Europe.

The United States of America cannot allow the abnormal to become the new normal.

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Filed under Defense spending, energy policy, Foreign Policy, Politics

Support The Troops Is Just A Sound Bite?


“Veterans groups and military associations are blasting a move by Sen. Tom Coburn, R-Oklahoma, intended to scuttle a veterans’ suicide prevention bill that has already passed in the House with strong bipartisan support.

The GOP lawmaker put a hold on the $22 million bill, which he opposes on grounds it has no offsets in spending elsewhere and would duplicate programs already offered by the Department of Veterans Affairs, he said.” [MilitaryNews]

H.R. 5059 would have allocated $22 million to assist veterans with PTSD or traumatic brain injuries… it was supposed to help reduce the suicide rate, a rate that the military admitted was underestimated in the past:

Beginning in 2005, suicide within the military — particularly for the Army — steadily began increasing to record levels every year, and may have peaked in 2012. Among full-time soldiers, the suicide rate soared to 29.7 deaths per 100,000 in 2012, well above a 25.1-per-100,000 rate for civilians of a similar age group during 2010, the latest year available, according to a Pentagon report. Among male soldiers, the rate was 31.8-per-100,000. There were a record 164 soldier-suicides that year.

The overall national civilian suicide rate was 12.1-per-100,000 in 2010 and 19.9-per-100,000 for men in 2010, according to the Centers for Disease Control.The Army National Guard rate for 2012 reached 30.8 deaths per 100,000 with 110 suicides. The suicide rate for men in the Army National Guard was 34.2-per-100,000,Pentagon data shows.

For full-time troops across the U.S. military, the suicide rate peaked at 22.7-per-100,000 in 2012 and fell to 19.1-per-100,000 last year, according to the Pentagon. [USAT]

Might we remind members of the Senate that the U.S. supported the expenditures to fight in Afghanistan and Iraq, and seemed perfectly pleased to put these costs on the national credit card – with no “offset” required? However, when it comes to assisting veterans who fought in those wars “we don’t have the money,” and “we have to see an offset?”

Here’s a news flash… the only casualties of war aren’t the destroyed munitions!  There’s something very very wrong about a country which will spend gazillions – few questions asked – on munitions and weapons systems, but when the needs of the military personnel are obvious the politicians can’t see their way clear to address them.

Those who aren’t supporting H.R. 5059 are cordially invited to take those yellow ribbon magnets off their bumpers!

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Filed under Defense Department, Defense spending, Veterans

Amodei and Heck Go Nuke

Nuclear missileHere’s what we get when things are reduced to “either/or” status in the deliberations of  the House of Representatives: Do we fund cleaning up toxic sites formerly used by the Department of Defense, or do we put the $3.4 million in Air Force research and development? There was a vote on an amendment to H.R. 4870:

“An amendment numbered 4 printed in the Congressional Record to increase funding for Environmental Restoration, Formerly Used Defense Sites, by $3,400,000 and reduce funds for Research, Development, Test and Evaluation, Air Force, by the same amount.”

The amendment was sponsored by Rep. Earl Blumenauer (D-OR), and it was defeated 179 to 24 [roll call 319] Nevada Representatives Titus (D-NV1) and Horsford (D-NV4) voted in favor of the amendment, Representatives Amodei (R-NV2) and Heck (R-NV3) voted against it.

In the grand scheme of federal budgeting a $3.4 million allocation isn’t all that much, but this issue does illustrate a problem for the Department of Defense, as specified in GAO reporting.

 “DOD is obligated to ensure that former defense sites are cleaned up to a level that is protective of human health and the environment. DOD has identified over 4,000 formerly used defense sites, which were closed before October 2006, and over 5,000 sites identified by several Base Realignment and Closure commissions that require cleanup.”

The Department implemented the GAO recommendations, and provides an annual report on its environmental clean up and restoration programs.  As with all things military there is an acronym for former sites, FUDS (formerly used Defense sites), and IRP (installation restoration program) and these are useful terms when reviewing the funding for these operations.

Funding for FUDS was $277.2 million in FY 2013, $287.4 million in FY 2014, and is projected to drop to $208.4 in FY 2014.  These funds would be allocated toward the restoration of 3.022 FUDS properties, and 8331 BRAC properties. [DENIX pp]  The system and the evaluation matrix are in place to implement the clean up and restoration projects.  However, only the Department of Defense could craft the following sentence explaining its goal:

Achieve RC at 90% of IRP sites, MRSs, and BD/DR sites at Active and BRAC installations, and IRP and BD/DR sites at FUDS properties, by the end of FY2018.” *Translation: RC = response complete; IRP = installation restoration program;  MRS = munition response sites; BD/DR = building demolition, debris removal; FUDS = formerly used defense sites.  BRAC = base realignment and closure.

The Department of Defense estimates that it is currently on target to meet this objective at a rate of 79%. Its projected rate is 92%.  The current FUDS rate is 78%, projected to 90%, and the BRAC rate is currently 83%, projected to 90%.  [DENIX pp]  In short, given the level of funding available, the Department of Defense is close to achieving its goal regarding the completion of restoration programs but doesn’t project a 100% “RC” in time for FY 2018.

There are two issues here, large and small.  Taking the smaller chunk first, the Department of Defense is close to meeting its targets for restoration projects, and appears at the ‘every little bit helps’ stage; meaning that the $3.4 million allocation could materially assist the Department in meeting its objectives.

By contrast, the comptroller of the Defense Department reports that the total allocated for Air Force research, development, evaluation, and testing appropriated for FY 2014 is $23,580,637,000 and the base figure for the same category in FY 2015 is $23,739,892,000. [ComptDoD pdf]  A bit of play with the plastic brains yields the information that the Blumenauer’s amendment would cost the Air Force research, development, testing and evaluation some 0.000143 of its budget.

At the heart of the floor debate, such as it was, is ‘seed’ money for a new cruise missile described by Representative Blumenauer as follows, ” The new ALCM does not yet have an official pricetag, but the research we have done suggests it is in the range of 20 to $30 billion. And a rebuilt nuclear warhead to go on it would cost another $12 billion, according to the National Nuclear Security Administration.” [ConRec]

Representative Freylinghusen responded:

“This program will provide a new air-launched cruise missile to replace a rapidly aging AGM-86. This is essential to our strategic deterrent and our ability to hold enemy targets at risk from standoff distances.

The Air Force requested $4.9 million for the program in fiscal year 2015 to continue studies and analysis in preparation for a formal acquisition program. This bill already takes a fiscally responsible $1.5 million cut from that amount.” [ConRec]

What have we learned?  That the new ALCM hasn’t gotten far enough off the drawing table to have a projected cost for the weapon.  We can estimate that the project will have the $800 million (or more) price tag discussed back in 2010. [GSN] We also know that the ALCM is a nuclear weapon, but the Pentagon hadn’t decided just what warhead would be fitted to the weapon. [GSN]

At this point the issue raised in a vote on a small amendment to a very large Defense appropriations bill takes on more meaning.

Two of Nevada’s representatives to Congress voted to provide the seed funds for the construction of a new nuclear weapon, one the Air Force considers essential to its “nuclear capacity,” and two did not.  There are some questions which were not raised during the brief discussion of the Blumenauer amendment on the House floor —

What is being said about Congressional priorities if funding for a new nuclear weapon is more essential than cleaning up and restoring formerly used military and defense installation sites?

If the new weapon is essential to the nuclear capacity of the USAF, then under what conditions and circumstances will it be used?  Or to put it rather more bluntly — whom do we intend to nuke and when? Perhaps, the two members of the Nevada congressional delegation who voted against the amendment would care to explain?

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Filed under Amodei, Defense Department, Defense spending, Heck, Politics

No Thanks For Your Lip Service

Veterans DayAnother Veterans Day, another lesson in the difference between “Thank You for your service,” and “Thank You” for your service.  Bunting and bands are lovely.  Donated meals are a nice gesture, as are donations to the various organizations which assist veterans and their families.   However, as far as I’m concerned those who proudly plaster their windows and bumpers with “Support The Troops” displays while voting for members of the U.S. Congress who do not support appropriate improvements in services for veterans are merely giving lip service to those who’ve done us a real service.

As of the Census Bureau’s Statistical Abstract 2010 (pdf) there were 2,076,987 veterans in the United States, of whom 189,662 were disabled.  There are 27,386 veterans in Nevada, of whom 1,882 are disabled.   As we might obviously expect, most of our veterans were enlisted personnel.  {see table 510 CBSA pdf}

Putting Some Legislation Where Our Mouths Are?

So, who is supporting those veterans with legislation to improve the quality of their lives?  Let’s look at the dismal history of H.R. 466, initially introduced in the 111th Congress.   Rep. Lloyd Doggett (D-TX35) put the Wounded Veteran Job Security Act in the hopper on January 13, 2009.  It passed the House on June 8, 2009.  The bill was sent to the Senate, where it went to the Senate Veterans Affairs Committee.   Nothing further was seen of the bill.

The bill, the Congressional summary of which is:

“Wounded Veteran Job Security Act – Expands the definition of “service in the uniformed services” for the purposes of uniformed servicemembers’ employment and reemployment rights to include a period for which a person is absent from a position of employment to obtain medical treatment for an injury or illness recognized as service connected by the Secretary of Veterans Affairs (VA), or for which a line-of-duty document has been granted by the Secretary of Defense (DOD). Directs such a person intending to return to a position of employment to notify the employer within a specified time period. Requires a person submitting an application for reemployment due to such an absence for medical treatment to provide the employer, upon request, with documentation to establish eligibility for reemployment, including a link between the injury or illness and the medical treatment obtained.”

seemed like a common sense piece of legislation. So, Rep. Doggett re-introduced it as H.R. 2875 in the 112th Congress.  This time it was referred to the House Veterans’ Affairs Committee, chaired by Rep. Jefferson Miller (R-FL) from which it never emerged.   Rep. Doggett kept trying.

In the 113th Congress the Wounded Veteran Job Security Act was numbered H.R. 1774, and was introduced in September 2013.  It was promptly sent to the Economic Opportunity subcommittee of the House Veterans’ Affairs Committee, chaired by Texas Republican Bill Flores (R-TX17).  No further action has been taken on H.R. 1774.

In short, a bill which would protect the job security of a veteran seeking  treatment for a service connected medical issue, can’t seem to get through the Republican controlled House of Representatives in the past two sessions.  Even GOP sponsored bills can’t seem to make it through the Congress — witness the sad tale of H.R. 1293 the Disabled Veterans Home Improvement and Structural Alteration Grant Increase Act of 2009.  The bill would increase the home modification funds for disabled veterans from $4,100 to $6,800.  [GovTrack] The bill passed the House 426-0 on July 28, 2009 — a person might have thought it had a chance in the divided, filibuster riddled,  Senate?  No, nothing happened.  See: [Veterans Guidebook to Opportunities and Benefits: How to Navigate the Funding Process and Services U.S. Senator Kirsten E. Gillibrand New York 2013, download]

Unfortunately, these aren’t the only examples of our flag pin bedecked Congress members speaking one way and acting another.  On September 19, 2012 the IAVA was moved to outrage over the failure of a Jobs for Veterans bill blocked by a Republican filibuster in the Senate:

“Today, Iraq and Afghanistan Veterans of America (IAVA), the nation’s first and largest nonprofit, nonpartisan organization for veterans of the wars in Iraq and Afghanistan, expressed outrage at the Senate’s failure to pass the Veterans Job Corps Act (VJC) – which would help put thousands of young veterans back to work. With Congress shutting down to campaign, no employment legislation will pass until after the election. And with the unemployment rate officially at 10.9%, veterans across the country are left treading water while Congress blocks legislation with procedural tricks.”

Words which might apply just as well in November 2013 as in 2012.  Words are fine…some action would be preferable.

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Filed under Defense spending, Politics, Veterans

Bits and Pieces

Jig Saw PuzzleThe Nevada legislature continues to talk about taxation issues, and talk and talk and talk and talk. No bills yet from either side just more talk and talk and talk and talk.  Full story at LV Sun.

The Reno Gazette Journal has a map with the break down by party affiliation in Washoe County.   Democrats are just barely behind in total county numbers.

Whatever would we do without the Pahrump Valley Times continuing its soap opera series on the Nye County Commission and the Nye County Sheriff’s office?  Here and here.

Two men from Ely, NV have been charged as ex-felons in possession of firearms.  [Elko Daily Free Press]  One of the two arrested is an undocumented alien, now facing deportation.  Now, remind me why Senator Dean Heller was opposed to background checks at gun shows or for Internet sales to catch — FELONS, fugitives, undocumented aliens, the mentally ill, and minors to help prevent guns from getting into their hands?  This vote may not be helping Nevada’s junior Senator:

“Nevada Dean Heller has seen a more modest decline in his approval numbers, from 47/42 right before the election to 44/41 now. However with the independent voters who were critical to his narrow victory in November, his approval has dropped from 52/37 then to now 42/42.”  [PPP]

70% of Nevadans support expanding background checks to gun shows and Internet sales. [HP]

Meanwhile, Senator James Inhofe (R-OK) is advising us that we can’t amend our statutes to prevent those who are on terrorist watch lists from having free and easy access to firearms.  Hint: His “logic” is a repetition of The Criminals Won’t Obey the Law argument.  Of course, criminals don’t obey laws — that is why we call them Criminals.

The Republicans can’t seem to get their narrative straight on U.S. options available for dealing with the Syrian civil war.  There’s the full on Let’s Have Another Lovely War Crowd, and the No Boots on the Ground Crowd, augmented by the I’m So Confused I’m Changing Positions faster than popcorn in a microwave group.

There’s this bit of news (old by now) from the U.S. Senate:

“The Senate moved quickly Thursday evening to help ease the Federal Aviation Administration’s ability to handle automatic spending cuts set forth in the sequester. Senators unanimously approved the “Reducing Flight Delays Act of 2013″ — a patch to fix the deep cuts that have furloughed air traffic controllers and delayed flights across the country. The bill gives the FAA authority to spend up to $253 million of money already in the FAA’s budget — but not allocated to pay for other things — to keep employees on the job and make sure more flights a on time. It was passed by unanimous consent, which means no senator objected.”  [NBC]

For a group that usually moves with all the expediency and alacrity of molasses off a frozen spoon, THIS is amazing.  Now how about the 70,000 youngsters kicked off the Headstart rolls? The elderly cancer patients having reduced medical services?  The reduction in the food assistance programs?  The cut backs in long term unemployment benefits? —- Crickets.

But wait, there IS a topic on which two deficit chickenhawk allies ARE willing to spend more money — the Abrams Tank. The problem is that the Pentagon doesn’t want more Abrams tanks… more at Think Progress.  We ought to file this along side the dismal story of the F-35 production problems and spending issues. [Bloomberg]

What we haven’t been hearing much about are the problems related to the Other Disaster this month, the one at the West, Texas fertilizer plant.  The major media outlets gave it scant coverage.  OSHA records show the plant hadn’t been inspected since 1985. PHMSA did an inspection in 2011 and found the plant didn’t have an emergency plan. The EPA last looked at the plant in 2006 and levied a fine for the lack of a risk management plan.   Unfortunately, the list goes on. [TP]  Congressional Democrats are asking for work place safety hearings in the wake of the disaster. [Reuters] Neither the House Agriculture Committee nor the Education and Workforce Committee have posted scheduled hearings to date on the matter.   Deregulation, a popular theme amongst the GOP membership, has created a situation in which going to work can get a person killed.

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Filed under Defense spending, Gun Issues, Nevada legislature, Nevada politics, nevada taxation

Sequestration Frustration and the White Queen’s Economics

Alice WonderlandThe House Republicans continue to manufacture mountains of problems out of mole-hills of economic issues, and they can’t be completely oblivious to the ramifications of their ideologically driven proposals for Nevada.  Here’s a hint:

“In fact, Nellis Air Force base has no new information about how the sequester changes might affect their operations, and is making no different plans to react to sequestration than they were a month ago, according to spokeswoman Jessica Turner. Civilian furloughs begin at the end of April, and from there on, will be equivalent to about a 20 percent pay cut through September.” [LVSun]

That’s five months with 20% pay cuts for civilian workers at Nellis AFB.  Although the article doesn’t give the average pay for a civilian worker at Nellis, we might reasonably assume that it’s comparable to other AFBs around the nation, in which case the average annual pay is about $50,000. [Portales] It’s also public knowledge since November 2011 that there have already been cuts to civilian employment at Nellis and other installations in Nevada:

“Combined, the Southern Nevada bases and range installations account for 10,393 military and 4,366 civilian employees with a payroll of nearly $1.2 billion. In 2010, there were about 6,416 indirect jobs created with an annual dollar value of $257 million. “We’ve had a civilian hiring freeze for some time. Of those 155 being considered, some or all might be cut,” Lustig said Thursday.”  [LVRJ]

If all the positions were cut back in 2011-2012, then we could estimate there are about 4,211 civilian jobs associated with military installations in southern Nevada.   4,211 employees multiplied by the average salary or wages of $50,000 comes out to $210,550,000 annually.  If we shave 20% of the total then we’d calculate a loss of $42,110,000 to the regional economy of southern Nevada.   It’s at this point where the square peg of ideological purity meets the round hole of economic reality.

The White Queen’s Economics

“Alice laughed: “There’s no use trying,” she said; “one can’t believe impossible things.”
“I daresay you haven’t had much practice,” said the Queen. “When I was younger, I always did it for half an hour a day. Why, sometimes I’ve believed as many as six impossible things before breakfast.”
Alice in Wonderland.

Impossible Thing One:Spending is the Problem.”  We have the Sequester because it is taken as an article of faith in Republican quarters that federal government spending is “out of control.”  Much was made of the fact that the U.S. was borrowing 36¢ on the dollar back in late 2011 , but there wasn’t much  said about the fact that this rate had been DECREASING.  For fiscal 2009 the rate had been 40¢ and 37¢ in FY2010.  [FactCheck]   This brings us to the report from the BEA in February 2013:

“The increase in real GDP in the fourth quarter primarily reflected positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, and residential fixed investment that were partly offset by negative contributions from private inventory investment, federal government spending, exports, and state and local government spending.  Imports, which are a subtraction in the calculation of GDP, decreased.” (emphasis added)

If the amount borrowed per dollar of revenue is declining, and if the sluggish rate of growth indicated by the 4Q GDP report is partially explained by a reduction in federal spending — then how on earth can a sentient person maintain the fantasy that “spending is out of control?”

Impossible Thing Two:   “Every dollar borrowed by government is a dollar that is not being invested in our private sector economy.”  This is an articulation of the Crowd Out Theory — this makes some sense IF and ONLY IF interest rates are HIGH.  Even then it’s a bit sketchy because some government revenues are invested in research, development, business subsidies, commercial ventures,  and the like.   Dare we venture into the real world and look at corporate borrowing costs?  If the Crowd Out Theory is correct, and government borrowing is making corporate borrowing more expensive, then what do we make of the following chart?

Corporate Bond Yields

Moody’s forecast shows top quality corporate bonds paying about 4.01% interest through August 2013.  As of July, 2000 corporations were paying 7.67%  interest. [FRB H15]  Thus much for government borrowing crowding out corporate borrowing.

Impossible Thing Three:   “Government can’t create jobs.”  When pressed about the relationship between teachers, firefighters, police officers, social workers, and “government” the answer from right wing ideologues is often punctuated by stammers — or pontifications about how public employees are Piggies At the Public Trough.  A decision must be made at this juncture: Does government not create jobs, or is it that government creates too many “good” jobs?

Caution must be taken with charts purporting to “prove” government employees are making “too much money” in comparison to the private sector, especially when educational and expertise requirements are taken into consideration.  Additionally, even the AEI is moved to report that workers moving from public to private sector employment are more likely to take a cut in pay.   However, this isn’t the core of the issue.

Government does create jobs, and in the private sector.   “But, but, but,” stammers our hypothetical ideologue, “Those aren’t REAL jobs. Permanent Jobs.”   Ask any construction contractor and the individual will tell you the obvious: No construction job is permanent.  When the highway is finished the job runs out and it’s time to bid for another contract.  Since we have a lovely backlog of clean water, sewage treatment, bridge building, and transportation related projects we’re fobbing off on our descendants, wouldn’t it be a nice “job creating” thing if we paid some of this bill ourselves and at least made a head start on the payments?

Impossible Thing Four:  “The national debt will turn us into an unstable place like Greece.” (Or Spain, or Italy, or Ireland, or Cyprus).   Nonsense.  For one thing we have our own national currency, [Creamer] and secondly, the economic policy process in the Eurozone should remind us all that the authors of the Federalist Papers were absolutely right in arguing we needed a unified national structure (our Constitution) in order to put ourselves on a sound fiscal basis.   If a person might wonder about what happens when a loose confederation attempts to behave like a sovereign nation, it’s advisable to look at Hamilton’s response in Federalist 15.  He was even more blunt in Number 17,  “Commerce, finance, negotiation, and war seem to comprehend all the objects which have charms for minds governed by that passion; and all the powers necessary to those objects ought, in the first instance, to be lodged in the national depository.”

Another factor too often overlooked during periods of hyperbolic hysteria is that the U.S. has something else the Eurozone does not — a federal monetary policy compliments of the Federal Reserve System which can monetize the federal debt, and a process by which we prevent “runs.”

Impossible Thing Five:  “Our national debt is a serious and immediate problem! Just look at all those digits on the debt clock.”   Calm. Down. The debt isn’t an immediate problem (even some members of the House GOP are beginning to back off this canard) what we need to be doing — in a rational universe — is to stabilize the national debt.   Here’s what our debt looks like compared to our Gross National Product:

Debt GDP

In the wake of the Great Recession and wars in Iraq and Afghanistan, we’re now looking at a 67.7 ratio; [Atlantic] but then Germany’s public debt is at 80.6, Canada’s is at 87.4, Italy’s is 120.1. [Atlantic]  The average in the Eurozone is about 82.5.   The trick isn’t to “pay off the national debt” because who would want their long term Treasury notes paid off before collecting all the interest?  The U.S., as noted previously, doesn’t have creditors — it has Investors, and as of right now the 30 year U.S. note is paying a rather measly 3.15% interest rate.  The ten year notes are only paying 1.95%, and the 20 year notes will earn an investor 2.77%.  [TreasuryYieldCurve]  If we aren’t obliged to pay higher interest rates to people who are investing in our national notes, then why should anyone believe that The Debt is a terrifying thing?

Impossible Thing Six:   “Federal Spending hurts our economy.”  Now, we’re back to Nellis AFB in southern Nevada, or to northern Virginia — home to thousands of federal employees, or to Youngstown, Ohio with its TechBelt Initiative.  What happens in places like Las Vegas and surrounds when $42 million is removed from the local economy in a year?  As repeated ad nauseam herein, “government spending” doesn’t fall into a black hole.  Salaries and wages are spent in the local economy, for everything from apples to zoology textbooks.  Those unsure of the importance of federal spending in local economies have only to look at the various renditions of grief on display when the Department of Defense seeks to close a base.  Once more, with great feeling — the formula for both aggregate demand and for the calculation of the GDP assumes government spending at national, state, and local levels.  GDP= C+I+G (for government) + (X-M).

What is truly alarming is the capacity of members of Congress to believe all six of these impossible things before breakfast.

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Filed under Defense Department, Defense spending, Economy, Nevada economy, Uncategorized

The Unflyable,The Unfloatable, and the Unnecessary

Before we get too involved in the latest bubbling brouhaha from House Speaker John Boehner (R-OH) about yet another deficit standoff, there are still some elements of the GOP scuttling of last summer’s debt deal which deserve more attention.  On May 10, 2012 Representative Mark Amodei (R-NV2) and Representative Joe Heck (R-NV3) voted “aye” on H.R. 5652, [roll call 247] which in the simplest possible terms protected Defense Department spending from any cuts while doing violence to Department of Agriculture, Health Care, Medicaid, Financial Regulation implementation, and Social Services Block Grants including Meals on Wheels and other programs for the elderly and disabled.

This opens the opportunity to discuss what cuts to Pentagon spending might have been rationally considered?

The Unflyable F-22:  Last Tuesday, Secretary of Defense Leon Panetta stepped in to announce new flight restrictions on this troubled aircraft, “…Panetta endorsed Air Force efforts to figure out why some F-22 pilots have experienced dizziness and other symptoms of an oxygen shortage while flying…” And, there’s more: “Panetta was briefed on the problem Friday, just days after a CBS “60 Minutes” report featured Capt. Josh Wilson and Maj. Jeremy Gordon, two F-22 pilots from Joint Base Langley-Eustis in Hampton. Each said that during some flights, they and other pilots have experienced oxygen deprivation, disorientation and other problems. They cited safety concerns and the potential for long-term personal health problems.” [VAPlt]

“The stealth F-22 Raptor, at an estimated $420 million each, is America’s most expensive fighter jet. Despite going combat ready in late 2005, the plane has yet to take off for a single combat mission. The whole fleet, estimated to cost U.S. taxpayers up to $79 billion, was grounded for nearly five months last year as the Air Force investigated the mystery problem, but a solution was never found and the Air Force has cautiously allowed the planes to fly since.” [ABC]

The cost of the entire Social Services Block Grant Program is $1.7 billion annually.  [CBPP pdf] It would take 47 1/2 years for the Social Services Block Grant program to run up $79 billion in expenses.   But, apparently Representatives Amodei and Heck believe it’s a “better investment” to continue spending taxpayer dollars on an unflyable aircraft than Meals on Wheels?

An Unfloatable Boat:   What on earth could make us leery of the Littoral Combat Ship (LCS) program?

“From the time the Navy accepted LCS-1 from Lockheed Martin on September 18, 2008, until the ship went into dry dock in the summer of 2011—not even 1,000 days later—there were 640 chargeable equipment failures on the ship.  On average then, something on the ship failed on two out of every three days. From the time the Navy accepted LCS-1 from Lockheed Martin on September 18, 2008, until the ship went into dry dock in the summer of 2011—not even 1,000 days later—there were 640 chargeable equipment failures on the ship. On average then, something on the ship failed on two out of every three days.”  [POGO]

But wait, it gets worse:

“These failures during deployment were not the last time LCS-1 would face significant operational challenges. Before and during the ship’s second set of rough water trials in February 2011, 17 cracks were found on the ship, according to the Navy’s Crack Monitoring Survey During Rough Water Trials Period #2 (enclosed).[13] For example, a crack over 18 inches long was found at the corner of the deckhouse near a bi-metallic strip that binds the ships aluminum deckhouse and steel hull together.”  [POGO]

What every ship needs — an 18 inch crack in the part that binds the deck and the hull together….  Think things couldn’t get worse?

“The Littoral Combat Ship (LCS-1) USS Freedom is plagued by extensive corrosion and manufacturing issues more recent and serious than anything the Pentagon or prime contractor Lockheed Martin has publicly acknowledged thus far.

This is based on a guided tour of the ship in dry dock, as well as sources intimately familiar with Freedom’s design, repairs and operations, U.S. Navy documents and defense analysts.

The vessel is rusting and blistered by corrosion in many areas, marred by crack repairs throughout the deckhouse and hampered by what appear to be flaws in vital piping systems.

Corrosion is particularly evident throughout the ship’s waterborne mission area, located at the Freedom’s stern, because of a large gap between the stern doors and the vessel’s deck floor, which allows water to pour in when the doors are closed. They are supposed to form a watertight seal (see photo.)” [Aviation Week]

Yes, the magazine has a picture.  And, how much as this LCS mess already cost U.S. taxpayers?  Answer:  $7.6 Billion. [Speier] How much did the Department of Agriculture spend on the SNAP (food stamp program) in 2011?  Answer: $75,669,320.  [SNAP annual report]  Now, divide $7.6 billion by $75.7 million — How long could we run the SNAP program?

The Dubious Double Engine:  The Bush Administration tried to kill it, the Pentagon doesn’t want it, the Senate voted it down, the House voted it down — but It’s Baacckkk!  That would be the duplicate engine for the F-35.

If we apply just a bit of imagination we can almost see this mechanical Banquo’s Ghost appear before Defense Secretary Leon Panetta who cries out: “What man dare, I dare: Approach thou like the rugged Russian bear, The arm’d rhinoceros, or the Hyrcan tiger; Take any shape but that, and my firm nerves Shall never tremble: or be alive again, And dare me to the desert with thy sword; If trembling I inhabit then, protest me The baby of a girl. Hence, horrible shadow! Unreal mockery, hence!” (MacBeth3:2)

However, no matter how many times the Pentagon, the Administration, or the Congress may shout out “Unreal mockery, hence!” members of the GOP in the House will resurrect it.

“Condemned as a $450 million-a-year boondoggle earmark from House leaders who represent General Electric jet engine workers, supporters on the GOP-controlled House Armed Services Committee yesterday included a provision in the fiscal 2012 Pentagon spending bill that would force the department to continue the dueling engine programs for the Joint Strike Fighter.

Section 215 of the markup from the tactical air and land forces committee, however, does not include any funding. Instead, it limits spending for improvements to the F-35 Lightning II propulsion system, now focused only on Pratt & Whitney engines, unless the secretary of defense continues with the General Electric engine project.”  [USNews May 4, 2012]

Yes, that is $450 million per year, for duplicate engines NO ONE wants.

It is all too easy to find waste and dubious transactions in the Pentagon Budget, but for all the $3,000 toilet seats and $500 hammers, there are some portions of the budget which might use more attention.

If the Pentagon could free itself from the expensive and evidently troubled programs such as those described above, could some funds be restored for military construction and family housing?  “The $4.9 billion sought for military construction and family housing is down from the $5.8 billion requested in fiscal 2011. Military construction carries that cut, as housing would see a $100 million increase over last year’s request.” [AT]

If the Defense Department didn’t have to fund duplicate engines at $450 million annually, then could we raise the pay for a new enlistee above $1,491 per month.  How many of us would put ourselves in harm’s way for $17,892 per year?  God Bless those kids, and most of them are our youngest and best, they’re barely starting out above the minimum wage, while willing to give us their maximum effort.

There are about 1,468,364 reasons to support Defense Department funding, those would be the young men and women serving this country, and they do need the best equipment we can provide. They need housing, medical services, and educational opportunities. They need better pay — what they don’t need are aircraft that can’t fly, boats that crack, and duplicate engines.   However, the Republican controlled  House of Representatives seems determined to sustain funding for DoD programs of highly dubious benefit at the expense of both our vulnerable military and civilian families.

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Filed under Amodei, Defense spending, Heck

Chart of the Day: The Origin of the Federal Deficit

The argument that we have to choose between social and economic programs or maintain our military and defense requirements is a false choice.  IF we truly intend to reduce our federal deficit it would be helpful to see that a very significant portion of it comes from (1) the Recession created by the Wall St. mortgage meltdown, and (2) the Bush Tax Cuts.

Economic growth + allowing the Bush Tax cuts for the ultra-rich to expire would put a large dent into the debt.   Applying so-called “austerity” criteria to reduce the debt would merely serve to eliminate economic automatic stabilizers like unemployment insurance benefits and the SNAP program.

Eliminating funding for Meals on Wheels, child care, and Social Services Block Grants for disabled Americans is a POLICY choice not an economic imperative.  We can avoid the FALSE CHOICE TRAP by understanding that we (1) need automatic stabilizers to prevent unnecessary volatility in our consumer based economy, (2) need to invest in American infrastructure to stimulate hiring by contractors and subcontractors, and (3) need to implement health care insurance reforms which will alleviate the drag on our national economy.

Austerity never begat prosperity.

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Filed under Defense spending, Economy, Federal budget, financial regulation

Coffee and the Papers: Fire Away

** Appointed Senator Dean Heller’s  (R-NV) opposition to the confirmation of Elissa Cadish to the federal bench may doom the nomination. [LVSun] It seems the nominee once said that “reasonable restrictions” might be applied to gun ownership and use.  It is always so much nicer when an excuse can be found, than  admit that the Senate GOP leadership has been slow rolling the confirmation of federal judges and other administration candidates.  [See Judicial Nominations.Org]

** Senator Heller’s position, that gun ownership is an absolute Constitutional right, and should not be subject to case by case consideration, leaves several important questions unanswered.  (1) Does an individual with a documented and immediate medical history of mental illness have a constitutional right to obtain and use a firearm? (Think: Tucson, Virginia Tech)  (2) Does an individual who has been incarcerated for a felony involving the personal injury or death of another person have a constitutional right to obtain and use a firearm?  (3) Does a person having a known affiliation with a violent drug cartel have the constitutional right to obtain and use a firearm?  The argument that with rights come responsibilities is often offered by gun ownership advocates, so if a person uses, or is very likely to use, a firearm in an irresponsible way then does the community have no recourse but to endure the consequent tragedy?

** Senator Heller’s position on firearms regulation most closely aligns with that of married  white men over the age of 50, who have incomes between $75,000 and $99,000 per year, who self identify as conservative Republicans, belong to evangelical Protestant churches, and live in rural areas.  [Pew Research pdf]

** So, if it is necessary to “Drill Baby Drill,” and some supposed shortage of gasoline responsible for higher gasoline prices, then why is Flint Hills Resources Alaska shutting down their North Pole Refinery for the next five months?  [ADN] The firm cites high global crude prices.

** Bring it on, Planned Parenthood filed suit against the state of Texas asserting that the state improperly excluded its clinics from participating in the Medicaid women’s health program. [Austin]

** Department of No Surprises: “Mid-Incomers Suffer in Polarized U.S. Job Market,” [Bloomberg] “Americans at the top and bottom of the income scale are benefiting most from the jobs recovery while those in the middle are getting left behind. ”

** Wendy’s is the 6th firm to pull its support from ALEC. [PR Watch]

** What war on women?  In Arizona it is now illegal to have an abortion after 18 weeks of pregnancy because the state will start the clock on the first day of the woman’s last menstrual period. [Think Progress] Mississippi is now considering a bill to ban abortions after six weeks of gestation even if the woman’s health is at serious risk. [ThinkProgress] Anti-abortion advocates are launching a new constitutional amendment campaign in Florida. [NewsPress] An ultrasound bill is up for consideration in the Rhode Island House Judiciary Committee. [BostonGlobeWisconsin Governor Scott Walker signed 50 bills into law including one requiring an emphasis on abstinence only sex education, barring abortion coverage in health insurance exchanges, and repealing the state’s Equal Pay for Equal Work non-discrimination statute. [FDN]  More than 50% of all women in the U.S. of reproductive age now live in states hostile to abortion. [Guttmacher]

** The federal government increased online access to conflict of interest data as a result of the newly enacted STOCK Act.  [OMBWatch]

** Congressional pressure is increasing for the Pentagon to rein in its increasing reliance on private contractors. [POGO] The GAO is questioning the Pentagon’s expenditures with private contractors. [GovExec]

** Right wing’ers are attacking a 17 year old Ohio high school student for wearing a T-shirt saying “Jesus Is Not A Homophobe.”  [RightWingWatch]

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Filed under Defense spending, energy, energy policy, gay issues, Heller, Women's Issues, Womens' Rights

FYI: U.S. Debt, Expenditures Comparison and Rating

For your information, a table showing the U.S. as compared to other countries currently having a AAA credit rating from Standard and Poor.

Sources:  IMF Report for Selected Countries World Economic Database October, 2010,  Military Expenditure as Percent of GDP, CIA World Fact Book, Health Care statistics Nation Master, Education Statistics CIA World Fact Book

Country Credit Rating IMF %GDP % GDP Def. % GDP healthcare % GDP Education
Australia AAA 23.68 3 9.5 4.5
Austria AAA 72.35 0.8 7.7 5.4
Canada AAA 80.48 1.1 9.6 4.9
Denmark AAA 46.72 1.3 8.8 7.8
Finland AAA 52.2 2 7.3 5.9
France AAA 87.56 2.6 9.7 5.6
Germany AAA 76.52 1.5 10.9 4.5
Hong Kong AAA 0.59 none n/a 4.5
Luxembourg AAA 22.92 0.9 7.3 n/a
Netherlands AAA 69.38 1.6 8.8 5.3
Norway AAA 54.26 1.9 9.6 6.8
Singapore AAA 95.24 4.9 4.3 3
Sweden AAA 41.3 1.5 9.2 6.6
Switzerland AAA 37.8 1 11.2 5.2
United Kingdom AAA 81.93 2.4 7.7 5.5
United States AA+ 99.32 4.06 14.6 5.5

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Filed under Defense spending, education, Federal budget, Health Care, national debt