Tuesday, February 24, 2009

Discretionary Spending?

This is a long one so be sure you have time to read it and study it. I am still doing research.

I started researching defense spending as part of the US Budget. Really I wanted to see percentages through the years since WWII. But, it is hard to find good solid numbers. I wanted to be ready when the Congressional speeches focused on how spending for defense is not “spending” in the same way the Recovery Act is “spending”. Why the debt incurred for defense is not as bad as debt incurred for other discretionary items in the budget. Is there such a thing as defense “PORK”?

Being a liberal made it harder. Like the media today I found myself bending over backwards, trying hard to be “fair and balanced”. Yet, I find the statistics, especially from the last years, are skewed. The wars in Iraq and Afghanistan have not been in the defense budgets.

Why am I trying so hard to prove a dove, or such a terrible thing as a liberal, can be fair? I am not sure. It may be liberals, real liberals, always listen to the other side; always give the benefit of the doubt to other ideas. After reading and rereading former Republican President Eisenhower's speech from 1961, I decided to go for it. Sometimes called the military-industrial warning speech, the speech contains the following words:

“...We annually spend on military security more than the net income of all United States corporations.
This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence -- economic, political, even spiritual -- is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.
In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the militaryindustrial complex. The potential for the disastrous rise of misplaced power exists and will persist.
We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together. …(Pres. Eisenhower 1961)

These past weeks during the discussions of the Recovery Act I waited for someone to bring up the costs of “defense” and someone to counter with the “jobs lost”. Sure enough I read it in articles about the F22. The original fighter was planned in the early 80's during the Cold War. The plane, like most defense spending, is over budget and perhaps has little use these days. Apparently President Obama must soon make a decision regarding the inclusion of the plane in his budget. The cut will affect somewhere in the neighborhood of 100,000 jobs in these days of high unemployment. Gottcha! Eisenhower's words ringing so true in my ears. “Our toil, resources and livelihood are all involved; so is the very structure of our society.”

The above quotes from the speech certainly warned perhaps with a sense of fatalism of our times. The General continues:
“Disarmament, with mutual honor and confidence, is a continuing imperative. Together we must learn how to compose differences, not with arms, but with intellect and decent purpose. Because this need is so sharp and apparent I confess that I lay down my official responsibilities in this field with a definite sense of disappointment. As one who has witnessed the horror and the lingering sadness of war -- as one who knows that another war could utterly destroy this civilization which has been so slowly and painfully built over thousands of years -- I wish I could say tonight that a lasting peace is in sight.”...

The speech ends with this prayer:
“To all the peoples of the world, I once more give expression to America's prayerful and continuing aspiration:
We pray that peoples of all faiths, all races, all nations, may have their great human needs satisfied; that those now denied opportunity shall come to enjoy it to the full; that all who yearn for freedom may experience its spiritual blessings; that those who have freedom will understand, also, its heavy responsibilities; that all who are insensitive to the needs of others will learn charity; that the scourges of poverty, disease and ignorance will be made to disappear from the earth, and that, in the goodness of time, all peoples will come to live together in a peace guaranteed by the binding force of mutual respect and love.”
Public Papers of the Presidents, Dwight D. Eisenhower, 1960, p. 1035- 1040
( http://coursesa.matrix.msu.edu/~hst306/documents/indust.html )

Below are a few links so that you may investigate for yourselves how well we fulfilled the “prayerful...aspiration”.

The above link is great for graphics and text on US Military Spending in a variety of ways. I find this article on US military spending compared to world military spending mind boggling.

Is the article on Defense as a part of discretionary spending in the budget
containing this quotation:
“ February 4, 2008

The Fiscal Year 2009 budget request includes $997 billion for discretionary spending, money the President and Congress must decide and act to spend each year, roughly $541 billion of which will go to "National Defense" (Function 050). The "National Defense" category of the federal budget for FY'09 represents over half of all discretionary spending (54 percent). [NOTE: These totals do NOT include funding for military operations in Iraq and Afghanistan. If the $70 billion requested for the "Global War on Terror" were included in both the request for the Department of Defense and the total for discretionary spending, the percentage of Pentagon spending of total discretionary spending would jump to over 57 percent.]

Want to read the 2009 budget for defense? It has lots of pictures and is easy to read-not like the old days. Of course you are just getting the easy parts.

To me, we have not done well as “an alert and knowledgeable citizenry...” to “..compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together. …”(Pres. Eisenhower 1961). Perhaps all we can do is just keep trying.

Tuesday, February 17, 2009

How Not to Write or What a Wonder, the Internet

What can I say. As I do research on a subject of interest I find so much on so many related areas, I can't stay focused.

So far the past few days I found much on the military-industrial complex which led to the military budgets since WWII, which led to government spending, which led to budget comparisons of many slices of the budget pie. (By the way, I'm not sure we can call it a budget.)

Guess it is time for an outline. I am older-we were taught to use outlines. Maybe I should say it is time for multiple outlines.

The more I use this wonderful tool, the Internet, the more I appreciate it.
What a great library. Not that I still don't value libraries, the brick and mortar types. Yet it sure is handy to sit in your pj's while you learn so much.

See, here I go:
It occurred to me the other day when the government had to fly Senators back and forth to get them to vote on the "stimulus package" that our government has not figured out some way to use IT to better advantage. You would think they could figure out some way to let those people who are ill or some such to vote from another location. Where is Homeland Security on this one. I remember a dedicated line between the White House and the Kremlin.

The previous paragraph was not a complete digression. It had to do with my appreciation of the availability of information and of the wonders of this age.

Yes, this age has many downsides but many wonders too.

Wednesday, February 11, 2009

Another Quandary about the times in which we live.

One of the questions I have been asking myself lately is about saving and buying.

Until the latest "meltdown" we were told we, the public, were not saving and were going too far into personal debt. So now here we are saving and not using credit as much. OOPS. So now a quandary. What to do; save in case you lose more of your income or spend to boost the economy?

At President Obama's press conference he was asked about this very thing. He answered fairly well. He basically said that right now we have to spend but later we will encourage spending.

OK. But I still am not sure about this balancing act between saving and buying.

There is a fair answer on line in the business section of the New York Times. The column is "To Spend or To Save? Trick Question" written by David Leonhardt.

In the column Mr. Leonhardt mentions John Maynard Keynes' paradox of thrift:

"Economic concept that if everyone tries to save an increasingly larger portion of his or her income, they would become poorer instead of richer. This is because the economy will slow down from reduction in demand and the very same people would lose their jobs. This theory, however, applies mainly to Keynesian economics where increased savings represent a diminishing circular flow of income."
paradox of thrift(BusinessDictionary.com. Retrieved February 11, 2009, fromBusinessDictionary.com website:http//www.businessdictionary.com/definition/paradox-of-thrift.html)

From this definition, you can link to other articles about this subject. Some will go into the differing views on the "paradox". After all it is a paradox.

Mr. Leonhardt's column won't make you feel great nor totally answer your fears about spending but it is good for a little education and food for thought. Which is maybe what a column should be.

Just remember this you and I have to decide what we Can do and what we feel comfortable doing.

Monday, February 9, 2009

Why and How did the US economy get so totally based in credit?

OK. I am now going to give this blogging stuff a try.

The questions about blogs are still unanswered: Why me, I have nothing to offer? There are far brighter people in this world than I. But, I have questions to which you might have answers and I can't get anyone here to take me seriously when I rant. So I guess it is an outlet for discourse born of frustration.

So here goes:

Why and How did the US economy get so totally based in credit? When did it happen?

Thinking back over my 60 something years to find an answer, I remember parents who would not buy anything unless they could pay for it. If they couldn't pay for it they bartered for it or, God forbid, they exchanged work for it. Mostly they bought things truly needed; clothes, food and the like. Of course, I should mention that where I spent my most formative years there was a lag in catching up from the “GREAT DEPRESSION”. See it was so a part of our lives, I even type it in caps.

I was one of those odd people that didn't get a mortgage for years because I didn't like debt.

When in the late70's someone explained to me that a house was the best investment... So, slowly I gave into the yen to “own” instead of paying someone else rent; to “own” a house meant I could have pets without feeling guilty or spending days and sometimes weeks hunting a place that allowed them. “Owning” also allowed me to plant flowers and get to see the results. All justifying the larger venture into credit and debt. My husband loved to buy cars so we already had some debt.

Back to the bigger questions about credit and debt though. Was it credit cards that led to this mess or was it before those evil things? I remember when a check was easily accepted as payment or cash was not so inconvenient. We didn't have enough of the stuff to be concerned for quite some time after I married.

Was it that evil television? We did see more advertising. Maybe it was before that, radio sure had lots of advertising-some may remember the ads for the new, clean Blue Coal; newspapers, and magazines advertised good stuff since way back.

Well guess what. I found one great article on consumerism that actually looks a different direction but does answer some of my questions. http://www.globalissues.org/article/236/creating-the-consumer has a pretty serious article updated in May of 2003 entitled: “Creating the Consumer. The article is by Anup Shah. Mr Shah writes in a way that even I can follow and gives many references including links to other articles he wrote as well.

So if you like me are trying to understand this great economic system that we are told must open the credit pipelines, I recommend the article mentioned above as a good beginning