Student loans, pensions, health care programs, school budgets are being cut across America. There hasn’t been the big investment in clean energy solutions that we were promised. We’ve had over a decade of war, and it’s planned to go on for several years more, at least. Foreclosures are on the rise again, and tens of millions of Americans remain out of work. A congressional supercommittee is working on a package of massive budget cuts that will lead to, if they are not approved of, a round of massive budget cuts.
It’s in this context that Barack Obama is announcing an expansion of the U.S. military in the Pacific region. As we’re struggling to make ends meet here at home, Obama wants to spend more on military strategy in an arena where the United States hasn’t suffered aggression since Pearl Harbor.
Must we? Is Australia in crisis? Is South Korea on the verge? Couldn’t we have a little expansion of domestic power within the American region?
In 2008, Barack Obama was promoted as an anti-war candidate. In 2012, he’ll be running as a chum of the military-industrial complex.
The deficit is 8.6% of GDP right now, but federal spending currently makes up 40% of GDP in the country.
It is theoretically possible in this situation for the US to cut spending, greatly reduce demand in the economy, cause a shrinkage of the economy and for reduce revenue to fall more than spending. In other words, cutting spending could increase the deficit. In fact, I think we should expect things not to behave like a textbook would predict. For instance, we are just a hair away from reaching a level of debt higher than our GDP (if you add in state and municipal debt, we are already there). According to economists, this is supposed to induce very high interest rates, as investors demand more compensation for the risk they take investing in a country which will never pay its debts. Treasury debt pays almost nothing, with no signs of rising. That the kneejerk response to this would still be “austerity” (or using gold as currency), even when the existing models of economics have demonstrably failed us, is pretty incredible. Of course it’s probably driven more by a cynical wish to gut the regulators and shut down the welfare state than any belief it will lead to public benefit. And, to be fair, this “SuperCommittee” isn’t going to trim much off the deficit, however much damage they do to people in the process, and maybe the reason for that is an awareness of what would result if they slashed the budget more aggressively, along with the attendant increase in unrest and crime that’s sure to follow when people lose their Section 8′s, unemployment, SSDI, food stamps, access to higher education, etc.
The military has been a big engine of the US economy for decades, along with housing and consumer spending. So with the other two in the doldrums, growing the economy brings Risk to mind.
(i.e,. the board game “Risk”, but with real armies). Obama: Hope and Change We Can Believe In. LOL.