Credo
"Sign on, young man, and sail with me. The stature of our homeland is no more than the measure of ourselves. Our job is to keep her free. Our will is to keep the torch of freedom burning for all. To this solemn purpose we call on the young, the brave, the strong, and the free. Heed my call, Come to the sea. Come Sail with me." -- John Paul Jones
"Pardon him, Theodotus; he is a barbarian, and thinks that the customs of his tribe and island are the laws of nature" --George Bernard Shaw, "Caesar and Cleopatra"
"And those who were seen dancing were thought to be insane by those who could not hear the music."--Friedrich Nietzsche
"A kind Providence has placed in our breasts a hatred of the unjust and cruel, in order that we may preserve ourselves from cruelty and injustice. They who bear cruelty, are accomplices in it. The pretended gentleness which excludes that charitable rancour, produces an indifference which is half an approbation. They never will love where they ought to love, who do not hate where they ought to hate."--Edmund Burke
“You say that it is your custom to burn widows. Very well. We also have a custom: when men burn a woman alive, we tie a rope around their necks and we hang them. Build your funeral pyre; beside it, my carpenters will build a gallows. You may follow your custom. And then we will follow ours.”--General Sir Charles Napier
"Μολὼν λαβέ" -- Leonidas
"Blogito Ergo Sum" -- Neptunus Lex
Put aside the rise in mandatory spending on entitlements, we’ve already had that conversation. Note that the proportion of mandatory federal spending dedicated to interest on the debt has actually shrunk 12.5% over the last 50 years.
just for the sake of thoroughness, it would be interesting to know what the net total $$ expenditures represented are (adjusted to a common time reference).
such as “$x vs $y in current value”
I’m not sure what that tells us though.
Say they tells us ‘in 1956 we spent X million in 1980 constant dollars vs. y million in 2007 in 1980 constant dollars’.
What does that really tell us in terms of what that buys, given that both the cost of military toys and supporting one military family (let alone housing, equipping, paying, and training one single soldier) have gone WAY up?
We have far more benefits than we did in 1956. There was no variable housing allowance.
The standard of living for military families is far higher. And we are attracting and keeping a smarter person now – with the higher tech tools we have, it costs more to train people and hold on to them.
So where is the comparable basis of comparison, dollar for dollar, even if you want to use constant dollars, even assuming you could somehow normalize them on some per capita basis?
Or did I miss/overshoot your point entirely? :p
“Say they tells us…”
Man. You can’t tell I’ve been working since 4 am, can you?
Sheesh.
When the actual dollar amount for net interest on the national debt has actually increased by a factor of 46 times ($5.6 billion in 1956, to $258.7 billion in 2006), isn’t saying that it has “shrunk 12.5% over the last 50 years” somewhat misleading?
Ah yes, lies, damn lies, and statistics. Facts are only what you can make of them, I suppose.
Are those “then year” dollars fliterman? It’s probably not going to make a 46x factor’s difference, but it is useful to the debate to get the underlying facts right. A Porsche cost nearly $4000 back in 1956. Today they go for quite a bit more.
There are, I think, two (potentially blended) conclusions to be tested in this chart (given that 1956 is not a historical outlier): First, that since interest on the debt has gone down by 1 percentage point (or 12.5% of total outlays), that we spend less on servicing national debt as contrasted to the total federal budget then we did 50 years ago. That either means that the debt ratio is intrinsically smaller or that we’re paying lower interest on the debt, both of which (separately or together) are signs of economic health, at least with respect to the overall picture.
The second possible conclusion is that that overall federal outlays have grown so quickly even after factoring in the increase in mandatory entitlements that the relative weight of debt servicing has gone down as well.
In either case, assuming that “gross numbers” are unimportant given year-over-year economic growth (or else I’d still be living in that $65,000 house I bought in Mississippi back in 1984), I find it interesting that the total proportion of federal outlays dedicated to paying interest on the debt is less than it was historically.
Oh, and Cassie we had an energetic discussion around here last week that essentially covered your points, adding that since we were a vastly more wealthy nation now than 50 years ago, it made sense that we spent more on national defense, even in constant dollars. That we wouldn’t, in other words, be very smart by maintaining a military funded even in inflation adjusted dollars that had 1956-level capabilities, pay, allowances, etc. Others disagreed, saying that we were “paying too much,” with some folks quoting Very Large Numbers and others exercised about deficit spending and interest on the debt. Again, my point was that Very Large Numbers – both in (now shrinking) deficits and gross expenditures are meaningless outside the context of what it is you hope to be able to accomplish in the world (the mission) and how much you have in the bank (tax receipts from the economy).
Sheesh…
(grabbing my little jet on a stick and zooming around the living room)
Economics never was my strong point.
lex ?
lex – Yes, you are correct in observing that I did not adjust the numbers for inflation (I was too lazy to do so). And yes, therefore my 46x factor would naturally be adjusted downward.
Nevertheless, I stand by my comment that the statement of a “12.5% shrinkage in net interest on debt” is misleading. (BTW, my numbers are slightly different than the WaPo, OMB graph, but I won’t quibble with that. It’s beside the point).
However, like you I also found it interesting that “the total proportion of federal outlays dedicated to paying interest on the debt is less than [I say, nearly equal to what] it was historically.” I believe your second “possible conclusion” that its “relative weight has decreased” helps to answer that question (even though interest rates may be slightly higher now than in 1956).
Another answer is that War is hardly a pay-as-you-go enterprise. It is financed with short and long-term debt. In 1956, the US was still paying interest on the tremendous debt incurred to finance WWII. And we continued paying interest on some of that WWII debt for another decade or so after 1956.
That the federal net interest payments were high in 1956 relative to today’s interest payments – and our not having had a financially demanding and debt-incurring world war in the past 30 years – it should therefore not be too much of a surprise to us.
first, here in NY, “Say they tells us..” is a perfectly grammatical construction.
second, you hit my point exactly. Even WITH much greater benefits, more military families, vastly improved technology (and vastly more expensive individual weapon systems), net net (in constant dollars) we’re STILL spending LESS. the “per capita” thread i would further be interested in is “per citizen”, not so much “per warrior”.
“since we [are] a vastly more wealthy nation now than [we were] 50 years ago, it [makes] sense that we spent more on national defense, even in constant dollars”
Considering that this statement is what kicked off the original discussion, I’m not seeing the “makes sense” part. You allude to 1) “the mission” and 2) tax receipts as the prime determinants of proper defense spending levels. Agree with 1, wholeheartedly disagree with 2. In fact, point 2 leads to an interesting phenomenon: Economy grows=>tax receipts go up=>military spending (a component of GDP) goes up=>economy grows=>repeat. This is a dynamically unstable system.
So, discounting point 2, we turn to point 1. Why has defense spending grown so much over the last as measured by constant dollars spent*? Are our military requirements vastly greater than they were thirty years ago? Strategically, no. We have no requirement to fight or finance a conventional world-war and/or maintain enough nuclear weapons to destroy every major city on the planet in 30 minutes. I would say that the military component of the counter terrorism mission could be accomplished for far less. At the very least, it could be accomplished far more effectively by reallocating funds towards SOF, intelligence and the conventional ground forces. Instead, we’re maintaining fleets of hugely expensive machines whose technological capability, while impressive and vastly greater than that of previous equipment, adds little to the military’s ability to influence events overseas. An F-14 is just as good as an F-22 when you’re fighting a Piper Cub.
So, yes, we are spending too much, in the wrong places. I also think we’re spending too much on mandatory entitlements, but they’re not really relevant to military requirements either. Why do they keep coming up?
(*As an aside, constant dollars reflect purchasing power, which is pretty much the only meaningful metric when examining spending tradeoffs. This answers Cassie’s question.)
Your point that increasing revenue growth and increasing spending is dynamically unstable is suspiciously close to an argument by assertion. You’re not going to go all Marx & Engels on me and talk about the “inherent contradictions in the system”, are you?
Growth is fundamental to a free market system dedicated to an increasing standard of living for its constituents. Micro to macro, people want to earn more money in order to buy nicer things and send the kids to college, corporations want to earn more profits in order to satisfy investors who yearn to share in those profits (or in the benefits accruing to present day, discounted cost ownership of a share of anticipated future earnings), et voila: the economy grows, as do taxable receipts. Some of that growth is from new economic activity, some from trade and a very great deal in recent years has come from productivity growth through technological gains which in turn are a creation of new economic activity. Nothing inherently unstable about that, and in fact it is a virtuous cycle with occasional cyclical pauses.
I’m pleased that we can agree that the mission tells you what you capabilities you ought to buy, but it continues to sadden me that you will not understand tax receipts affect how much you can afford to spend. The difference between the mission requirements and money available determines how much risk you are willing to take in order to fund other priorities.
Which by the way, is why the issue of mandatory spending keeps coming up. I think it is useful to point out that with a 2005 DoD appropriation of ~$450 billion, you would have had to close half of DoD down, furlough half the forces, stop construction of 1/2 of all new ships, aircraft, tanks and infrastructure, stop paying on half of all retirement salaries and medical costs to make up for the annual budget deficit projected for this year. Shutting us down entirely in 2004 wouldn’t have paid the bills, and you’d have to shut it all down – all of it – for ten years to make a mark on the gross debt.
Risky, yah? Not to mention all of those poor pensioners.
Or put another way, you would have to fundamentally restructure the national military strategy. Come home and get ready to play defense at home rather than abroad.
There’s a reason why Europe was shattered after World War II, and a reason why it took a US-funded Marshall Plan to rebuild it. Not having been bombed into a pre-industrial state, all of our stuff still worked.
And your strategy of focusing on added SOF is in fact admirable – we’re already heading that way! But it isn’t like a Charlie Sheen movie, they have to have conventional forces to back them up, develop intel, move them around, etc. And while SOF can do a wonderful job of killing individuals given adequate support, they have a hard time changing the underlying conditions which led to the fact those individuals needed killing.
And you’re making the classic mistake of thinking that the campaign we’re currently engaged in will be the fight we fight tomorrow. Just as no one could have perceived twenty years ago that we’d be bug-hunting with aircraft carriers and B-52 bombers (both of which did a fine job at it, by the way) it’s challenging to know what kind of force structure to build against potential threats 10-20 years down track. The war(s) after this one.
All we do know for certain is that “only the dead have seen the end to war,” and, technologies today being ever more complex, we won’t have time to gear up for it from a standing start if we don’t invest today.
May I ask what field it is you’re studying in?
Taggart: “Someone’s gotta go back for a shit-load of dimes!”
(H/T to Blazing Saddles for the quotation)
Why should there be an adjustment for then dollars to now dollars?
The information in this table is given as a percentage not an amount. This makes it essentially a ratio.
Oh, I wasn’t referring to the table, I was quizzing fliterman on his numbers in comment#4.
“Then year” is Pentagon bureacratese for “constant” dollars. It’s trivially important to distinguish between absolute growth (or decline), both in receipts and outlays, and the inflation-adjusted variety.