Tag Archives: government spending

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On Military Spending and Trade, Trump Puts Americans Last

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English: The Pentagon, looking northeast with ...
English: The Pentagon (Photo credit: Wikipedia)

US president Donald Trump signed yet another massive government spending bill — $1.3 trillion — on March 23, after threatening a veto.

Why did he threaten a veto?

Because the bill doesn’t fund his cherished US-Mexico border wall idea, and because it doesn’t address the  Deferred Action for Childhood Arrivals program that he’s threatened to end absent a “fix.”

Why did he sign it?

For the military spending. Because, he says, “for the last eight years, deep defense cuts have undermined our national security,” and we just can’t have that.

Deep cuts? In what universe?

In every year since 2010, the US has spent more than half again as much on its military as in 2003 — two years into the Afghanistan war and the year that it invaded Iraq.

Since 2010, the US has never spent as little on the military as it did in 2007, the year before Trump’s predecessor was elected.

The US Department of Defense’s 2017 base budget was a whopping 7/10ths of 1% lower than the 2010 budget, which was smaller than the 2011 and 2012 budgets. Total US military spending in 2017 was only 4% less than in 2010.

Not only is Trump wrong about what actually happened, he’s wrong about what the effect would have been if things had happened that way. There’s nothing wrong with the security of the United States that “deep cuts” in military spending wouldn’t make better.

The US armed forces are far too big, far too powerful, and far too expensive to bear any plausible relation to defense. The primary purpose of US military spending is not to defend the United States, but to continuously transfer as much wealth as possible from the pockets of working taxpayers to the bank accounts of large “defense” contractors.

It’s a giant welfare program. And nearly three decades of continuous war, starting with Desert Storm in 1991 and escalating after 9/11, are the excuse for keeping the welfare checks flowing.

If Trump was serious about national security, he’d veto any budget that didn’t include those non-existent “deep cuts” he’s complaining about. A 75% cut over 10 years would still leave the US the largest military spender on the planet, but likely much less inclined to disastrously intervene in other people’s arguments.

But we already knew Trump wasn’t serious about national security, didn’t we? His tariffs on steel and aluminum prove that. They, too, are welfare programs designed to benefit corporate welfare queens at the expense of American workers and consumers. And they flout the well-known law of history laid down by Otto T. Mallery:

“If soldiers are not to cross international boundaries, goods must do so. Unless the Shackles can be dropped from trade, bombs will be dropped from the sky.”

“America First!” Trump cries, while putting Americans last — and in ever-increasing danger.

Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

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Sorry, Republicans: If You’re Not Cutting Spending, You’re Not Cutting Taxes.

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President Donald Trump and Republican congressional leaders rolled out their new tax plan on November 2. Since all bills must have titles, they’re calling this one “The Tax Cuts and Jobs Act.”

Republican “tax reform” theatrics have worn thin over  many months of waiting, but I still prefer a more theatrical title. “A tale Told by an idiot, full of sound and fury, Signifying nothing” rings true. Four centuries later, Shakespeare’s MacBeth is a better description of the matter than any coming out of Washington, DC.

Yes, there’s plenty of quibbling across the aisle over everything from top rates to the home mortgage interest deduction, but neither party’s politicians seem willing to tackle the most basic, indisputable, and relevant fact: Since Congress isn’t cutting spending, Congress won’t be cutting taxes either.

In 2017, the US government will spend more than $4 trillion. That’s 21.5% of Gross Domestic Product, more than one out of every five dollars in wealth created by the US economy.

In order for that wealth to be spent by the political class, it must first be taken from the productive class. To spend a dollar, one must have a dollar. There are three ways to get the money, and all of them are taxation whether they’re called that or not.

The first and most obvious way, and the way dealt with in “The Tax Cuts and Jobs Act,” is through overt taxation. Personal income taxes. Payroll taxes linked to Social Security and Medicare. Capital gains taxes. Corporate taxes.  Tariffs. Etc., etc., ad nauseam.

The second way is borrowing. Government borrowing is more accurately described as deferred taxation. Borrowers have to be paid back. When government borrows a dollar, it is promising its creditors that it will, sooner or later, tax that dollar out of you (or your descendants) to pay back the principal, and that until then it will tax you a little bit each year to keep up interest payments.

The third way is inflation (which is tied to borrowing in ways too complicated and boring for a short column to cover). For all the murky descriptions of what inflation is, it’s simple: The government creates more dollars out of thin air, making each dollar in your pocket worth a little less. Inflation is a tax, too. A sneaky tax, but a tax nonetheless.

For every dollar a government spends, a dollar must be taxed. The only exception to that rule is if the government collapses and leaves its creditors unpaid.

In order for Congress to truly cut taxes, it must first balance the budget, then begin cutting that balanced budget. Until and unless it does so, your taxes can only go down in the political imagination, not in reality.

Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

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Budgets, Taxes, Deficits and Debt; or, Mulvaney Versus the Math

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English: South Carolina State Senator Mick Mul...
South Carolina State Senator (now director of the US Office of Management and Budget) Mick Mulvaney speaking in front of a crowd in Newberry, SC, in August of 2010 during his run for the U.S. House of Representatives. (Photo credit: Wikipedia)

“What you see in this budget is exactly what the president ran on,” US Office of Management and Budget director Mick Mulvaney told George Stephanopoulos on ABC’s “Good Morning America” in late February.

The president’s overall budget proposal is still under wraps and hasn’t been sent to Congress yet, but Mulvaney was making the media rounds to flack for its first big component: A $54 billion increase in military spending.

Mulvaney’s claim is true as far as it goes. Donald Trump ran for president on a promise to “rebuild” the most expensive war machine in the world, a “defense” establishment that hasn’t missed a meal since World War Two and that, if cut by 90%, would still be the first or second largest in the world (depending on what China spends from year to year).

Mulvaney didn’t look very happy about it. I don’t blame him. As Stephanopoulos pointed out, Trump made a few other promises, too — and those promises represent an insoluble math problem for the numbers guy.

On one hand, in addition to the increased defense spending, Trump wants a $1 trillion infrastructure program and he’s pledged not to touch Social Security or Medicare spending.

On the other hand, he’s promised to cut taxes.

Even if his hands weren’t so famously small, they’d have trouble holding on to both sets of promises while juggling two more in the air: He’s promised to reduce the federal government’s annual spending deficit and pay down its gigantic debt.

Yes, the “Laffer Curve” predicts the possibility of increased government revenues from general economic growth after tax cuts,  but those numbers still just don’t add up. It’s not possible to spend more, and tax less, and pay down crippling debt, and bring a runaway budget into balance.

Unless Trump and Republicans in Congress are willing to buckle down and get serious about spending cuts (if you’re not serious about cutting military spending, you’re not serious about cutting spending) Mulvaney’s real job for the next four years won’t be balancing budgets, it  will be making excuses.

Fortunately for Trump, he has considerable relevant business experience that he can bring to bear on the problem.

Unfortunately for the rest of us, that experience is in the casino industry where, no fewer than four times, he spent enterprises into insolvency then left his partners holding the bankruptcy bag.

I predict that his presidency will bring that number to five.

Thomas L. Knapp (Twitter: @thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

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