Federal Budget Day (Read It and Weep)

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President Bush today will propose a 2007 federal budget of more than $2.7 trillion, even while calling for savings in Medicare and other domestic programs, according to congressional and administration officials with knowledge of the spending plan.

The budget is an increase over the $2.57 trillion spending plan Bush proposed last year. Much of the increase will go to defense, homeland security and benefit programs that grow faster than the economy. The officials who gave details of the budget asked not to be named because the plan wasn't scheduled to be released until today.

More press account here.

Read the whole megillah here online (though at a relatively scant 9.8MB, it seems positively light, don't it?).

Read one of the least inspiring presidential texts–"The Budget Message of the President of the United States"–here.

A snippet:

As this Budget shows, we have set clear priorities that meet the most pressing needs of the American people while addressing the long-term challenges that lie ahead. The 2007 Budget will ensure that future generations of Americans have the opportunity to live in a Nation that is more prosperous and more secure. With this Budget, we are protecting our highest ideals and building a brighter future for all.

NEXT: Losing Lost Liberty

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  1. The 2007 Budget will ensure that future generations of Americans have the opportunity to live in a Nation that is more prosperous and more secure

    ….and has much, much higher taxes….

  2. What’s real GDP? $13 trillion or so?

  3. Time to cut military spending.

  4. Gillespie, you sure that 9.8MB is not just the size of the zip file?

  5. Military spending nothing, at least a military is an arguably legitimate function of government. More like time to eliminate wellfare, social security, medicare/caid, and the DEA.

  6. Gillespie, you sure that 9.8MB is not just the size of the zip file?

    PDF files don’t compress that well, so the uncompressed size is only about a MB more than the compressed size.

  7. That is a huge amount of money but the GDP is approximately 13 trillion dollars so that government is about 20% of GDP, about what it has been over the last twenty years of so. That is either encouraging or even more depressing depending on your point of view.

  8. MORE DEPRESSING!!

  9. Welfare, rather. Damn, still can’t spell.

  10. Timothy, All the things you mention are arguably functions of the government (as is anything the government does). All of them can be argued as preventing widespread death and destruction. Time to stop playing favorites. Time to cut military spending. It is the principled libertarian thing to do here, any phobias or investment stocks you may have notwithstanding.

  11. Dave W., your arguments might be stronger if you stopped making insinuations about stock portfolios.

  12. Why don’t you give us your detailed outline concerning what portions of the military budget should be cut. Since, you know, you’re an expert and all, and have identified that that’s where all the fat is.

    Enlighten us.

  13. Phil, I have given my military budget plan on other threads here. Surprised you haven’t seen it.

    My plan is that military spending gets cut back to 10X the size of the military budget of the nation with the next largest military budget. I sometimes say 10X China, but I am not actually sure they are next biggest. But I know it is somebody.

    Side note to T.: Military spending is big, profitable business. I won’t call it a market, because it is not that. But it is a big vested economic interest, and that is why some powerful people support military spending and why others can’t bring themselves to criticize it (even as they criticize every single margin of gov’t waste in every other context).

  14. One time another poster thought I was proposing *increasing* military spending to 10X that of China.

    I wish!

  15. Phil,

    From a libertarian perspective, there is plenty of fat in the military budget. Bringing all troops home from everywhere outside of US borders would be a good start. I certainly don’t buy into the security requires empire neocon nonsense.

    That being said, I have no interest in joining Dave W’s crusade solely against the military budget. There’s plenty of meat that can be slashed everywhere.

  16. MP:

    I have always said that ss (that is, social security) should be cut in parallel with the military budget. I have said that on previous threads and I said it on this one. I will dig up an old post where I discuss why that is important, if you need some help on that.

    Please don’t mischaracterize my crusade. It ain’t for leftists. It ain’t for rightists. It is for fearless libertarians. I am not sure it is really a crusade, either. I see it more of a peaceful, but highly sassy, political movement.

  17. I will dig up an old post where I discuss why that is important, if you need some help on that.

    Nah. I’m glad to hear that you don’t have a singular axe to grind against the military. It’s tough to keep up with every thread.

  18. I would talk more about ss cuts here but you guys seem to get that part without my help. If someone ever came on here and said “I am basically libertarian, but make a big exception for ss,” then I would be taking them to task just like I do the military overspenders.

  19. Dave W: anything is arguably a function of government, but few of them are arguably “legitimate”. “Provide for the common defense” and all that. I suppose you could argue that social security “promotes the general welfare”, but causing deadweight loss through so much intergenerational money transfer doesn’t seem to promote the general welfare in any real sense. And, frankly, I’m unable to find “pay for old people’s cruises” in the ennumerated powers of Congress.

    Not that there isn’t legitimate fat to be cut from the military budget, I’m sure there is, but I can think of better places to start. Entitlements that will ramp up in cost quickly and damn soon are the most threatening budgetary boogeyman I can think of. The growth rate of Medicare and Social Security are going to swamp the entire buget soon, and it’s damn unlikely that a Congress & Presidency from the blue side of the aisle will do anything about those. So I say start there.

    No defense stocks were flogged in the making of this comment.

  20. How much exactly would ending the Drug War save us in our Federal Budget? I’d imagine it would be substantial what with less prisoners, less interdictions, less inefficient police work, etc, but would it make that large a dent in a $2.7 trillion budget?

  21. full disclosure…

    I may own some defense stocks through my S + P index funds, not sure how much though.

    Dave W.

    While I certainly believe that government expenditures on military are excessive, I have a few comments on your propsed budget.

    1) While our budget on defense might be significantly more than anyone else, our entire economy is bigger than everyone else as well. A more fair measure might be to attempt to limit expenditures to a percent of GDP.

    After all, we also spend way more on healthcare, education, and other social services than any other country, but no one is suggesting we limit those to some multiple of other nations.

    2) Our military budget also pays for the defense of Japan and Germany, as a result of their WWII aggression. Now one might say that we should stop doing this, that they should pay for their own defense, but given the military history of these nations that is not at all an obvious choice.

    But overall, some rule of thumb like limiting military spending to 3-4% of GDP makes a lot of sense to me.

  22. My plan is that military spending gets cut back to 10X the size of the military budget of the nation with the next largest military budget.

    You have a very curious definition of the word “detailed.” Absent further details, I will assume you therefore mean a proportional 10% cut in every department, including pay for servicemen.

    Care to try again?

    MP, I agree with you. I just want to see Dave defend his statement.

  23. We could have a much more efficient army by switching to mercenaries.

  24. Phil, since the military is such a huge part of the budget, it’s fair to assume (or document) that the amount of waste and corruption is larger there, too. How about, for once, the folks in charge of military spending and contracts take an honest and practical look at the massive amounts of waste and corruption and take genuine steps to decrease both? It seems like that’s the best place to start.

    By the way, this is the same thing I say to people who say public schools need more money, though the problem in the military, I think, is exponentially worse.

  25. We could have a much more efficient army by switching to mercenaries.

    We are already doing that, they are called contractors on the battlefield.

  26. As long as most Americans are uneducated or half-educated (can we say “liberal?”) there will be no cuts in government spending ever. Between the people who just like “free” stuff and the people that think that the poor will immediately wither away if spending is cut, we’re talking about 95% of the population. The principled, economically educated folks like us are all online bitching about everyone else.

  27. Regarding utilization of mercenaries:
    Machiavelli says that’s a bad idea.

    Regarding budget:
    Seems to me that there are two factors in correcting the budget, and they are related.

    1) Return to currency backed by actual assets (gold, for example). Removing the ability of the government to “borrow” money from the Fed while using the future income of the citizens as collateral (sp?) and requiring that dollars payable do not exceed dollars collected in the previous year. In short, “Don’t got it, can’t spend it.” Which could plausibly be affected by #2.

    2) Downsizing the government’s role to those enumerated powers given it originally in the constitution. Education wasn’t there. Prohibition wasn’t there. Corporate pension bail-outs weren’t there. Retirement security wasn’t there. “Free” medicine for all wasn’t there. Delegating currency management to a private “central” bank wasn’t there. I could go on.

    My question pertains to the logistics…how can years of court rulings declaring the above-listed items to be constitutional be overturned? Without overturning those rulings is there any other way to reign in the beast? Anyone have any ideas?

  28. Comments on Lanny’s comments:

    1) While our budget on defense might be significantly more than anyone else, our entire economy is bigger than everyone else as well. A more fair measure might be to attempt to limit expenditures to a percent of GDP.

    Well, each approach has its pro’s and cons. If you focus on the liklihood that another nation or alliance could launch a successful military campaign, then it makes the most sense to limit military expenditures based on military expenditures in other countries. This where you get my 10X China standard. Maybe 4X the rest of the world combined (probably a much lower number) would be a better yardstick.

    On the other hand, basing it on the value of protected assets makes some sense, too. However, I would suggest that if you follow this approach, then the people who own the assets should pay for the protection. Not sure u would like where that plan is headed . . .

    Another problem with this approach, is that an aggressive cost cutter will point out that you merely have to defend the assets marginally more than similar assets are defended in some other country. In other words, if destruction of assets is the name of the game, then rational enemies will go after the least defended assets. the spending in that least defended country would set a soft ceiling on how much other budget-conscious nations would need to spend because they have the systemic protection of a built-in target of opportunity.

    After all, we also spend way more on healthcare, education, and other social services than any other country, but no one is suggesting we limit those to some multiple of other nations.

    I would love to see data on this stuff. I think the freemarket US is at 15% or 16% of GDP on healthcare spending. All the socialized countries with longer lifespans (there are 20-30 of ’em) clock in at about 12%, if I got good info when I researched it. Of course you would expect the military spending gap to be smaller because of economies of scale. Do you think it really is?

    2) Our military budget also pays for the defense of Japan and Germany, as a result of their WWII aggression. Now one might say that we should stop doing this, that they should pay for their own defense, but given the military history of these nations that is not at all an obvious choice.

    Then it is time to end that . . . what’s it called again, kids? ENTITLEMENT PROGRAM.

  29. I could go on.

    Let me help: undeclared wars, nation-building, spying, defense of other nations, spreading democracy, space exploration.

    Yeah, this is easy.

  30. I could agree with Dave W. on the military budget – just limit it to a certain percent of GDP. With stipulation that we never fall technologically behind.

  31. We could have a much more efficient army by switching to mercenaries.

    We are already doing that, they are called contractors on the battlefield.

    As one of those contractors on the battlefield, I can tell you we cost a lot more and in many cases are no more efficient…

  32. As long as most Americans are uneducated or half-educated (can we say “liberal?”)

    This is a good way to make thinking people immediately stop listening to you, because only someone so partisan as to be removed from objective reality thinks that most uneducated or half-educated people are liberals. I’m not saying that most are conservatives because I don’t have any data at hand, but your assertion is ridiculous.

  33. AnonCowherd,

    You are exactly right. If DOD is getting something for $50, they immediately contract it out for $100 and claim they have saved money.

  34. dave w.

    Very interesting points.

    As to the payment question;

    However, I would suggest that if you follow this approach, then the people who own the assets should pay for the protection. Not sure u would like where that plan is headed . . .

    If by assets you mean GDP or current income, then I would posit that this is currently the situation. If you look at the progressive tax burden in our country and remove social security and medicare (since they do not directly affect military spending), then the wealthiest 1-5% in our society already pay by far the lion share of taxes. This only makes sense, since they make the most money.

    According to nationmaster (a pretty reliable page, http://www.nationmaster.com), we spend something like 3.2% of our GDP on the military, more than other advanced nations Britian is 2.32%, Sweden 2.1%, etc). So a significant gap exists, but I would guess not on the order people imagine.

    As for the defense of Japan and Germany, that was an explicit decision made not as an entitlement, but as a self-defense measure. Historically, these 2 nations have precipiated many significant military conflicts (WWII, etc…), and although things have changed it may not be wise to provide them the arms to do so again.

  35. “only someone so partisan as to be removed from objective reality thinks that most uneducated or half-educated people are liberals.”

    I agree. I don’t understand how you came to the conclusion that I was one of those people. What I meant was that most liberals have a poor understanding of economics and therefore are not fully educated. At no time did I say that the only (or most) half-educated people were liberals. I said that most liberals are half-educated.

  36. andy,

    Sorry for the confusion. I agree that most liberals are half-educated in terms of economics, but wouldn’t it be clearer and more accurate to state that most Americans are half-educated about economics? Though I might agree that more conservatives than liberals have a better education regarding economics, certainly you’re not suggesting that the conservatives running the federal government or the conservatives who voted them into power are acting like they understand economics better than liberals, because they’re really not.

    Again, sorry for my reflexive response before.

  37. “I agree that most liberals are half-educated in terms of economics, but wouldn’t it be clearer and more accurate to state that most Americans are half-educated about economics?”

    Yeah, it’s just that I think “liberals” should be held to a higher standard precisely because of the fact that, on average, they’re more highly educated than the proles. Peter Progressive, with his master’s degree should be more knowledgeable about economics than Axel Auto-Worker, and therefore Peter’s lack of knowledge is more distressing.

    “Though I might agree that more conservatives than liberals have a better education regarding economics, certainly you’re not suggesting that the conservatives running the federal government or the conservatives who voted them into power are acting like they understand economics better than liberals, because they’re really not.”

    “Conservatives” in the government are just like every other politician: they want votes. Reasoned, informed arguments about fiscal responsibility aren’t as popular as pork promises. They may, on average, have a better understanding of economics than “liberals,” but their principles go out the window once they’re in power.

    “Again, sorry for my reflexive response before.”

    Happens to the best of us.

  38. A couple of points:

    1) The amount of money spent on the military does not have a direct correlation with the effectiveness of the military. Ask the insurgents in Iraq, Al-Qaeda, or the Somalis.

    2) Having military funding tied to any percentage or come out of a formula based on what someone else is spending will result in shortage in the case of war and waste during peacetime. Trying to fix something with a rule like that almost never works out.

    3) Spending money smarter and not spending more of it would be great for our military but unfortunately our servicemember’s political masters will not let them get rid of the expensive projects or equipment that they want to because no politician wants to appear weak on supporting the military.

  39. All of the above being said…

    What does it take to actually make our government smaller? Every single thing run by the government has fat that can be cut. Waste and corruption are everywhere. The debate over where to cut spending doesn’t amount to shit because no one here has a method to get people in office that will actually cut spending.

    There is no reason to debate corruption and waste are everywhere.

  40. What does it take to actually make our government smaller?

    A revolution, apparently. It certainly won’t happen under the current system.

  41. Though I might agree that more conservatives than liberals have a better education regarding economics

    Try asking a conservative about antitrust law. The economic education of a conservative is a selective and partisan thing that can potentially close itself off from new info and further learning on an ongoing basis.

    Better to be half educated than bad educated!

  42. It is also worth noting that the same bloated military budget proposed yesterday, simultaneously makes permanent the tax cuts, some of which I believe was capital gains tax cuts. In other words, the same document not only increases military spending at a ridiculous margin of uselessness; it also helps shift the cost away from the people who disproportionately benefit from the protection.

    The outrage over that is so silent here that it is deafening!

  43. Before I proceed, I must admit that my political ideology is a mixture of Libertarian and Green. (I justify that in that Democrats and Republicans have become lax, complacent, duopolists and are ignorant of the realities facing America today.) However, regarding the budget, I’d like to refer you to the Cato Institute web page and other links on the http://www.politics1.com website which is how I found this website. Regarding the military and it’s spending, I believe that all of us are intelligent enough to know that nothing in society exists in isolation. National strength is more than just military might; it is also a measure of quality of life, prosperity, technological insight, etc. Remember, you are only as strong as your weakest link. If you ever play national simulation games such as Age of Empires or Civilization, then you know what I’m talking about. One idea posed on the global ideas bank cites the historical example of how a Jewish doctor survived the Holocaust due to his medical knowledge and suggests that his home country of Great Britain be an international medical center that would become off limits during wartime like Swedan in banking. Many countries that hate us which require military intervention have simply been bullied by the US in years past. Our military is in this way self-perpetuating. A stronger and more economical military offensive might be to find replacement for oil which would drive many enemies bankrupt and the Middle East would no longer be important to us politically, except for a few religious groups. Furthermore, there are many risks that must be considered in the face of limited resources. I believe that Libertarians do care about the same issues as Liberals do (poverty, health care, crime,etc.), but simply have a more pragmatic approach about what approaches can be effectively administered and problems can be solved. They also effectively point out, as on the Libertarian Party website, that government, in many cases, exacerbate, the social problems. I’m also technocratically inclined in risk management’s role in public policy. Can $1 achieve the same desired improvement in military as $1 in job creation? My belief is no. One example is the drug war: by legalizing drugs, we can refocus efforts on the worst of harmful crimes instead of consensual crimes, better regulate drugs from minors, generate tax revenue and jobs, provide environmental alternatives such as paper marijuana, and prevent drug profits from organized crime and terrorist organizations that we are paying military money to fight. As mentioned by Dave W above, tax cuts have remained permanent, which while some Libertarians may praise, this short-sightedness only strengthens the national debt which leads to permanent government involvement in both monetary and fiscal policy, higher inflation and unemployment, less money for more productive private enterprises, and a host of other problems.

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