By Jeremy Lott, April 27, 2016
America is in a world of hurt financially. The U.S. government’s deficit for fiscal year 2015 was $439 billion, a figure that has been actually celebrated by the Obama administration since it’s so far down from the peak deficit of $1.4 trillion and change in fiscal year 2009.
Yet it isn’t much to celebrate and the underlying news is much worse. A report by the respected, bipartisan Committee for a Responsible Federal Budget (CRFB) chides the administration by saying that “simply citing the 70 percent fall in deficits over the past six years without context is misleading, since it follows an almost 800 percent increase that brought deficits to record high spending levels.”
That whopping 800 percent increase came care of bipartisan bailouts of the financial sector and then a massive stimulus bill, signed by presidents George W. Bush and Barack Obama. It also largely came on top of already increased military spending for two expensive wars in Afghanistan and Iraq.
So government increased domestic spent like crazy at the same time as revenues were plummeting as the private sector took it on the chin from the housing crunch. Many Americans, having parked their nest eggs in real estate and lost big, continue to feel the effects of that crunch.
According to the same report, “Even as deficits have fallen, debt held by the public has continued to rise, growing from $5 trillion in 2007 and $7.5 trillion in 2009 to $13.1 trillion today. As a share of GDP, debt rose from 35 percent in 2007 to about 74 percent in 2014 and 2015.”
That private debt exists alongside $19.2 trillion of accumulated government debt, just at the federal level. And we haven’t even begun to contemplate the horror of the coming entitlement crunch, with perhaps $100 trillion of unfunded liabilities between Medicare and Social Security if those programs continue on their present course.
Growth can help here, a bit. CRFB reports that “annual deficits have fallen substantially over the past six years, largely due to rapid increases in revenue (largely from the economic recovery), the reversal of one-time spending during the financial crisis, small decreases in defense spending, and slow growth in other areas.”
But credit ratings agencies have downgraded, or threatened to downgrade, U.S. debt for a reason. The deficit isn’t a problem that’s going to fix itself. The bedrock problem is that the federal government continues to spend far too much money. Spending, on domestic programs, on entitlements and, yes, on defense is going to have to be limited or capped or cut if Congress is to get serious about putting America’s financial house back in order.
It will be especially important that changing defense priorities be part of any bipartisan budget deal. America is the biggest military spender in the world and by a country mile. No country even comes close. No three countries even comes close.
In fact, America spends more on its war making capability than the next seven highest spending nations put together, according to the annual survey of the Stockholm International Peace Research Institute, which reported, “The United States, with total expenditure of $596 billion, remains by far theworld’s largest military spender, at nearly three times the level of China, which is ranked second.”
We’re comparing year to fiscal year here, which can be tricky. But, roughly – and only in theory, as a way of understanding these numbers --, we could have covered the whole $439 billion deficit with the $596 billion we spent on the military last year, with $157 billion left over. Even the difference between those two figures is more than the world’s number three spender, Saudi Arabia, shelled out.
This is not to suggest that military spending be cut back radically to $157 billion or anything remotely like that, but rather to say that defense spending ought to be rethought and recalibrated in in light of the actual defense needs of our country. That would cost a whole lot less than the current world policeman role we’ve been stumbled into.
We can afford to keep a strategic, agile, world class military at the ready, but only if we are willing to confront the spending problem squarely, with bayonets drawn and that army of red ink in our crosshairs.
Jeremy Lott is a senior fellow at Defense Priorities.
This piece was originally published by The Blaze on April 27, 2016. Read more HERE.
Photo courtesy of Wikimedia.