Decade of Zero; Defense Spending Up 72% Since 2000: Are We Any Safer?

Inquiring minds are noting Gates Restores Boeing, Lockheed, Northrop Programs in 2011 Plan.

U.S. Defense Secretary Robert Gates directed the Air Force to restore to its proposed budget three major programs the service offered to cancel, including a Boeing Co. program to build and install upgraded software in the cockpits of C-130 transports, according to a budget document.

Gates directed restoration of $285 million in 2011 and $1.843 billion overall through 2015 on the C-130 program. He also told the Air Force to restore $2.4 billion for an Internet- like radio that Lockheed Martin Corp. is building for aircraft and vessels.

In addition, he told the service to add $280 million to continue installing upgraded Pratt & Whitney engines on the Northrop Grumman Corp. Jstars surveillance plane.

Defense spending since fiscal 2000, adjusted for inflation, has grown about 43 percent. When war costs are included, the number increases to 72 percent. Gates has called for modest growth going forward, with emphasis on improving the security of nuclear weapons, building capabilities to conduct irregular warfare, cyber defense and long-range strikes.

Gates�s directive means �either the service�s budget priorities are out of sync with those of the defense secretary or that that the proposed cancellations were advanced knowing there was little likelihood they�d be accepted,� said Loren Thompson, a defense analyst for the Lexington Institute, an Arlington, Virginia-based defense research organization.

Gates may be supporting the C-130 program because the Army and Marine Corps have become �heavily dependent on those propeller-driven airlifters in Iraq and Afghanistan,� Thompson said.

Support The Troops By Ending The War

These support the troops efforts are galling. The best way to support the troops is to end these stupid wars and bring the troops home. We have wasted $trillions of dollars since 2000, and we are less safe than before.

Gates wants "modest" increases going forward. What we ought to do is slash military spending by 50% and consider that a mere down payment.

If we are going to waste money, we should at least get something out of it. War produces negative benefits. The same amount of money spent upgrading the electrical grid or building nuclear energy reactors would at least have given us something tangible.

I am not proposing such projects, I am proposing that I would rather see such projects than dropping bombs and making enemies.

Amazingly, building and dropping bombs adds to GDP. Realistically dropping bombs should subtract from GDP. We get negative benefits from needless wars and war mongering.

Sadly, what this all boils down to is government is willing to put our kids lives at risk, just to keep unemployment rate from getting any higher and so warmongering CEOs at Boeing, Lockheed Martin, Northrop Grumman, etc can make a fortune in stock options.

Keynesianism Delivers a Decade of Zero

What has all this ridiculous spending accomplished? Ron Paul has the answer in Keynesianism Delivers a Decade of Zero.

The Austrian free-market economists use common sense principles. You cannot spend your way out of a recession. You cannot regulate the economy into oblivion and expect it to function. You cannot tax people and businesses to the point of near slavery and expect them to keep producing. You cannot create an abundance of money out of thin air without making all that paper worthless. The government cannot make up for rising unemployment by just hiring all the out of work people to be bureaucrats or send them unemployment checks forever. You cannot live beyond your means indefinitely. The economy must actually produce something others are willing to buy. Government growth is the opposite of all these things.

Bureaucrats are loathe to face these unpleasant, but obvious realities. It is much more appealing to wave their magic wand of regulation and public spending and divert blame elsewhere. It is time to be honest about our problems.

The tragic reality is that this fatally flawed, but widely accepted, economic school of thought called Keynesianism has made our country more socialist than capitalist. While the private sector in the last ten years has experienced a roller coaster of booms and busts and ended up, nominally, about where we started in 2000, government has been steadily growing, because Keynesians told politicians they could get away with a tax, spend and inflate policy. They even encouraged it! But we cannot survive much longer if government is our only growth industry.

Krugman seems pretty disappointed with zero, but if we continue to listen to Keynesians in the next decade instead of those who tell us the truth, zero will start to look pretty good. The end result of destroying the currency is the wiping out of the middle class. Preventing that from happening should be our top economic priority.

We marched the troops in, we can march the troops out. Unfortunately, no number of lives killed or destroyed is too high to pay as long as CEOs can make insane amounts of money on it, and Obama gets to artificially lower the unemployment rate in the process.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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