Saturday, May 12, 2012

Cutting the defense budget won't hurt the economy: The Nation makes Gary Johnson's argument for him

Gary Johnson making the point:
cut the defense budget, cut taxes,
and create 1.5 million new jobs!
Once they get him on the national debate stage, I expect both President Obama and Governor Romney to attack Libertarian Presidential candidate Gary Johnson as "soft" on defense, willing to "compromise" our national security, and prepared to scuttle the recovery by causing additional unemployment when he presents his plan to cut the Pentagon's budget by 43%.

So some preparation is necesary to innoculate the American public against believing this nonsense.

First, in FY 2012 we have a $902.2 billion defense budget.  It is inevitable, with either Obama or Romney in office, that we will pass through the $1 TRILLION dollar mark by 2014 at the latest.

So Gary Johnson proposes to cut this to $514,254,000.  Wow!  That's a decrease of $388 Billion!

How low is that?  It's halfway between what we spent between FY 2003-FY 2004.
What Gary Johnson proposes is stepping back to FY 200304
spending levels in US Defense.

In perspective, the US currently spends 41% of the total WORLD military expenditures (and that figure is probably low, because the SIRPA calculations do not appear to have take the supplemental Iraq and Afghanistan appropriations into account).  For comparison purposes, to the US 41%, China (#2) spends 8.2%, Russia (#3) spends 4.1%, and the UK and France (tied for #4) each spend 3.9%.
That big blue part?
That's us.

If Gary Johnson's plan were enacted, the US share of world military spending would decreas to about 23.4%, and would still exceed the military spending of China, Russia, the UK, and France combined.

It would be the same level of military spending we were doing the year we successfully invaded Iraq and toppled Saddam Hussein, while simultaneously carrying out operations in Afghanistan.

Hardly irresponsible.

But wait!  Wouldn't such a dramatic cut in spending have massive economic consequences, or, as The Nation puts it:
Many who would like to protect the military from the budget knife raise economic arguments to make their case: Won’t cutting military spending be bad for jobs, just when we need to maintain focus on reducing unemployment? Won’t it threaten the country’s long-term technological capabilities?
Members of today’s military-industrial complex—the constellation of forces, including Democratic and Republican politicians, weapons manufacturers, lobbyists and the Pentagon leadership, whose influence President Eisenhower warned against in 1961—claim that significant reductions in the military budget would decimate US defenses and inflict major damage to the economy. In fact, these claims are demonstrably false.
I was astounded to discover The Nation actually making an essentially Libertarian point about the damage defense cuts would do to the economy.

Follow it carefully here--you need to read it in sequence, but I have put the (literal) money quote in bold:
The primary economic argument made by members of the military-industrial complex against cutting the Pentagon budget is that it would produce major job losses. . . .

In any event, it is indisputable that the Pentagon is a major employer in the US economy. How could it be otherwise, given that the Pentagon’s $700 billion budget is equal to nearly 5 percent of the GDP? In fact, Pentagon spending as of 2011 was responsible for creating nearly 6 million jobs, within the military itself and in all civilian industries connected to it. In addition, because of the high demand for technologically advanced equipment by the military, a good share of the jobs created are well paid and professionally challenging.
However, the crucial question is not how many jobs are created by spending, for example, $1 billion on the military. Rather, it is whether spending that $1 billion creates more or fewer jobs when compared with spending $1 billion on alternative public purposes, such as education, healthcare and the green economy—or having consumers spend that same amount of money in any way they choose.

 Oh, crap.  Did The Nation just notice that a billion dollars placed in the hands of American citizens might actually produce more jobs than centralized government spending on the military?

Yes, I believe it did, since it repeated the argument again:

In fact, compared with these alternative uses, spending on the military is a poor source of job creation. As we see in the graph (right), $1 billion in spending on the military will generate about 11,200 jobs within the US economy. 
Just giving the money to households to consume as they choose would generate 15,100 jobs, 35 percent more than military spending.

(To be perfectly fair, what I snipped out was The Nation's contention that government spending on clean energy, healthcare, and education would create even more jobs.  And the rest of the article focuses heavily on why we shouldn't reduce government spending, just shift it around.)

What does this mean to Gary Johnson's argument for cutting the Defense budget by 43%?

It means that Governor Johnson's plan would create 1,513,200 NET new jobs!

 Somebody needs to explain to the American people that cutting the Defense budget 43% not only won't endanger us, but it will lower our taxes while creating 1.5 million new jobs.

That somebody is Gary Johnson, but he needs our help with this one.

Oh, and just for kicks and grins, Governor Romney has proposed a plan that would increase our defense spending by $2.3 TRILLION over the next ten years.

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