Do we have enemies that are using our misunderstanding of our monetary system to undermine our actual national defense?

Could they be playing on our deficit phobia that’s taken hold to subdue us?

Or is it all just innocent fraud?

While there is certainly spending on waste and fraud in the military that should be addressed, weakening our actual defense capabilities we would otherwise elect to support is an entirely different matter.

What was a serious problem has just taken on a new dimension.

The deficit terrorists are now a force that’s subverting our real defense needs.

On Mon, Jun 14, 2010 at 5:37 AM, Project on Defense Alternatives wrote:

Dear Warren Mosler: I am pleased to announce publication of “Debt, Deficits, and Defense: A Way Forward” by the Sustainable Defense Task Force (members listed below). The report, which is now publically accessible, identifies options for $100 billion annual savings in the US defense budget for consideration by the recently appointed deficit reduction commission.

You can access the report on the home page of the Project on Defense Alternatives here:

You will also find there a video of the briefing the Task Force held on 11 June in the US Capitol with over 100 congressional staffers, NGO leaders, and journalists in attendance.

The report concludes that, in order to find significant savings and put defense on a sustainable path, we must change how we produce military power and the ways in which we put it to use. It sees recent official reform efforts as a first step, but concludes that “they fall far short of what is possible and what is needed to put defense spending and defense strategy back in check.” The report offers suggestions for strengthening current reforms and argues that, in addition, we must rethink our military commitments and our defense strategy.

You can follow discussion of the report and other debates on US Defense Policy on the PDA Defense Strategy Review page, here

Thanks, Carl Conetta and Charles Knight – best contact:

Sustainable Defense Task Force

– Carl Conetta, Project on Defense Alternatives
– Benjamin H Friedman, Cato Institute
– William D Hartung, New America Foundation
– Christopher Hellman, National Priorities Project
– Heather Hurlburt, National Security Network
– Charles Knight, Project on Defense Alternatives
– Lawrence J Korb, Center for American Progress
– Paul Kawika Martin, Peace Action
– Laicie Olson, Center for Arms Control and Non-Proliferation
– Miriam Pemberton, Institute for Policy Studies
– Laura Peterson, Taxpayers for Common Sense
– Prasannan Parthasarathi, Boston College
– Christopher Preble, Cato Institute
– Winslow Wheeler, Center for Defense Information

24 Responses

  1. Geez, these people need to read a book or two.
    after Pearl Harbor the Federal Reserve announced that it would provide the economy “an ample supply of funds” and “exert its influence toward maintaining conditions in the United States Government security market that are satisfactory from the standpoint of the Government’s requirements.” In practice, this meant that the Federal Reserve stood ready to buy sufficient amounts of Treasury bond issues to ensure that the price of the bonds did not fall. By this “pegging” process, the Federal Reserve was able to keep interest rates from rising.

    I believe this might be the bridge too far (“An idiom inspired by Operation Market Garden, meaning an act of overreaching”) for deficit hawks.

    As a political matter, they can threaten federal support of the unemployed and the elderly with impunity. But when they start talking about cutting $100 billion a year from defense contractors, well, like the movie says, there will be blood. A better strategy would be to get a buy-in from defense contractors to reallocate their federal contracts from defense spending to infrastructure spending, but spending public money for for public purposes is not on the deficit hysteria agenda.

  2. On second thought, defense spending either goes to defense contractors or to military personnel, so every dollar of budget cuts not coming out of the defense industry will only inflame the VFW, American Legion and other advocates for (in FDR’s wonderful phrase) The Pride of Our Nation.

    As for reallocating defense spending to “infrastructure spending”, I’d note that the Army Corps of Engineers already lets out all sorts of public works contracts and I believe still manages (in cooperation with the DOT) the Pentagon’s “Railroads and Highways for National Defense program” to ensure rail and highway infrastructure can support defense needs. The Navy is largest purchaser and operator of nuclear reactors in the world and the Air Force, which uses a tremendous amount of jet fuel annually (the DoD has long been the largest petroleum purchaser in the world) has invested billions in synthetic and bio-fuel research and procurement.

    There’s a lot of existing defense contracts that could easily be rewritten to provide “dual use” benefits that’d strengthen both our national security and our civilian economy. But alas, it wouldn’t do anything to reduce our federal deficit… assuming for 10 seconds that should matter at all. :O)

    1. Beowulf, they need to placate progressives[liberals and the defense cuts are the ploy for that. They will cut the defense spending to pass a cut in social welfare and then immediately lobby for restoring and increasing defense. This is a subterfuge.

      1. That could be, but I don’t see Electric Boat or Lockheed playing the part of sacrificial lamb even if they know its for show… they’re not going to make concessions that some future president may hold them to for real.

      2. I should have mentioned that including defense in the deficit reduction commission budget cuts has already been endorsed by commission member Sen. Tom Coburn (R-OK). No doubt the Pentagon should do a better job keeping its books and should reallocate funding to more useful projects. On the other hand, if, say, Berkshire Hathaway was obligated to hide tens of billions of covert weapons and activities in its annual budget, I imagine its financial records would look be pretty incomprehensible too.

        Coburn, a Muskogee Republican and a member of a special deficit commission, delivered a memo to the panel late last month outlining a “depressing array” of financial problems in the Defense Department and calling for a freeze on some spending until the Pentagon can get its books in order.

  3. What hypocrites!! Even the deficit hawks want more MMT!

    “by the recently appointed deficit reduction commission.”

    Deficit Reduction Commission Seeks Increase in its Budget
    Tax Analysts Eric Kroh, Fiscal Commission Bemoans Lack of Resources, 2010 TNT 106-2 (June 3, 2010):

    Saddled with a tight deadline and great expectations, members of President Obama’s deficit reduction commission say they may not have the resources necessary to meet their task.

  4. Of course, the deficit reduction commission will be fair and even-handed. They’re willing to cut funding for National Security AND Social Security to prove their love and devotion for the bond market. I’d suggest they’re a bit out of paradigm :o)

    Paul Volcker, former Federal Reserve chair and adviser to the president, declares, “In my view, we can deal with the Social Security problem fairly promptly.” Cutting benefits, Volcker adds, “is not going to deal with the deficit problem in the short run, but it’s confidence building.” John Podesta of the Center for American Progress, another adviser, agrees but says, “Reforms could starkly demonstrate to skeptical debt markets that the United States is willing to take on a politically difficult fiscal issue.”

    In other words, targeting Social Security is a smokescreen designed to reassure foreign creditors and avoid confronting the true sources of US indebtedness…

    1. Whacking old folks is a death wish in US politics. SS is still the “third rail.” You can touch it will one hand, but not both. If the old folks think this is for real, there will be hell to pay at the voting booth. Oh, and boomers aren’t going quietly either, and there’s a lot of them. Somehow, I don’t think this is going to fly.

  5. Nothing gets an American’s attention more than “our boys” and the “defense” of the nation. Exactly why does the US need “defense?” Are we in danger of being attacked? By whom? Canada? Mexico? Guatemala? Uruguay? It’s the world that needs to be defended from the US, by far the most predatory nation on the face of the earth. Nothing could be better for the moral health of this nation than to dismantle its murderous war machine and its arms industry with its hundred of worldwide bases and its limitless pork barreling.

    1. Frank, you are not reading the news. The US is being attacked from Mexico and needs to put an army on the border. And who knows how many terrorists are sneaking across the Canadian border, probably with a noock’leer bomb, or germ warfare, or chemical weapons, like fluoride to put in the public water supply. 🙂

      1. California put up border, so clearly it thought it was worth doing.

        Moved problem to Arizona, which is now having same issue.

        there is more to border security than repelling uniformed invading armies

        Norther states do not have issue with Canada for reason that is obvious to anyone not a MORON

      2. Not actually true. I happen to know anecdotally it is a porous border that is the portal for many Eastern Europeans. They have a support network when they arrive and have no difficultly traveling back and forth when they please. What other groups may be coming through this “port of entry” i don’t know.

        OK, it’s not millions, but the idea that the border with Canada is not open is wishful thinking. If the US were to try to secure its northern border, it would come with great difficulty and at substantial cost.

      3. Toms Hickey:

        Where did I say Canada border was not poros?

        I just say that norther states do not have problem with canada border in its current state, while south states have very big problem with mexico border in is current state.

        the reason for this is very very obvious

      4. Zanon, I was writing facetiously in reply to Frank, suggesting that providing the security that many people are demanding would eat up a significant portion of GDP. We need to have a debate on what is really needed, set goals, and provide effective and efficient means. This will involve dismantling the military Keynesianism that was a product of the Cold War, and against which President Eisenhower warned in his farewell address to the nation.

      5. providing the security that many people are demanding would eat up a significant portion of GDP… This will involve dismantling the military Keynesianism that was a product of the Cold War, and against which President Eisenhower warned in his farewell address to the nation.

        To respond to your second point first, Eisenhower knew how to go with the flow so he’d use Congress’s love of military Keynesian to further non-military goals… The national highway system was justified for the value it’d bring to national defense (of course, General Eisenhower knew better than anyone that the Army moves its heavy equipment by rail and not by road). His program to subsidize higher education wasn’t justified for the social and economic benefits that our universities bring this country (as former president of Columbia University, he again knew this field very well), rather it was pitched as a necessary response to Soviets launching Sputnik.

        Finally, the President’s Council of Physical Fitness wasn’t justified for the public health benefits of school-based health screenings or because it’d encourage children to adopt healthy lifestyle habits, nope… Ike sold it as a matter of sound military policy. The Council was needed because the Selective Service was having to reject too many draftees due to poor health.

        As for your point about a “significant portion of GDP”, If we’re talking about controlling our Southern border, that’s not true at all. We’re spending about $136 billion this year for combat operations in Afghanistan and Iraq, We could fence the entire border for the cost of between 3 days to 22 days of combat operations.

        A 2,000 mile state-of-the-art border fence has been estimated to cost between four and eight billion dollars. Costs for a wall that would run the entire length of the border might be as low as $851 million for a standard 10-foot prison chain link fence topped by razor wire. For another $362 million, the fence could be electrified.

      6. As for your point about a “significant portion of GDP”, If we’re talking about controlling our Southern border,

        Actually, the right is calling for control of the borders — all of them. They are also pushing hard for a statewide clamp down on “illegals.” I’m living in Iowa at the moment where the “problem” appears to me to be significant, but that’s not stopping the wingers from ranting about it — although admittedly we did have a huge bust in Postville that’s made the national news recently. And to the wars and and border control, the expense of total information, stepped up surveillance, etc., that the GWOT and war on drugs (illegals, you know) is used to justify. And the prisons, and …..

        Oh, and did I mention that traffic cameras and downtown surveillance is proliferating also. The expense of all this is huge. Of course, the traffic cameras are expected to be a profit center.

        When you total it all up, the military Keynesianism, the wars foreign and domestic, the internal security, the intelligence, and so forth, it’s pretty significant. And then there’s the mercenaries…..

  6. You’re right, Tom What was I thinking? 🙂

    US and Mexico: bad karma. We purloined half their country. We made sure that a plutocracy that handed over their resources to corporations and rewarded their plutocrats and made sure the right venal politicians were firmly in place–most recently and spectacularly with their latest “President.” We helped ruin their agriculture with our agribusiness and drove millions into the cities and into the US from the countryside.We supported the mindless “war” against narco traffic, while continuing to ignore the real causes and conditions. We happily employed illegals because they are cheaper and we don’t have to pay unemployment compensation, and because it makes for cheaper veggies. Etc., etc. The chickens are coming home to roost. In Europe, grosso modo, the chickens come home to roost for the colonial powers who raped and pillaged in the Muslim countries and ruined their agriculture and societal fabric. You can count on chickens coming to roost here eventually in the wake of our tender mercies in Iraq and Afghanistan. Just as ideas have consequences, so do actions.

  7. Any ‘answers’ or suggestions on what to do with our border with Mexico?

    Full employment in Mexico via an elr and adequate agg demand would probably lead to them building a fence to keep us out, but that’s down the road.

    1. seal it with fence like California did

      also, change constitution so people born here do not automatically get citizenship. it’s time has passed.

      then have guest worker program.

      but in democracy, these things are impossible no matter how much sense they make.

    2. The long term answer is for the US to develop a Latin America policy that views Latin America as a real hemispheric partner. If the US doesn’t do this, it is going to create a bunch of Cuba’s and Venezuela’s as blow back to the current neglect and exploitation.

      I have long wondered why the US doesn’t get that Latin America would become one of its prime resource and trading partners as it develops. Perpetuating the status quo is just going to exacerbate an already festering situation. Eventually the hemisphere needs to move toward some kind of a union that dismantles borders rather than making them tighter.

      Building walls and fences is not going to cut it, even short term. It will be like the Maginot line. Look at the so-called war on drugs. Total failure at the cost of billions.

      You have to treat the cause of a problem, not the symptoms. Same with the global war on terrorism. It should be the global war on poverty and exploitation. Instead, US policy is part of the problem.

      The biggest things we can do short term is decriminalize drugs (Libertarians should support that) and clamp down on businesses that hire illegal — if we are serous about illegal immigration, which we are not. Prices would rise, and people would be screaming about inflation at the grocery counter as well as construction costs.

      Anyway, it is both parties interests to resolve this, because of the changing demographics. The GOP is trying to have it both ways, demagoging their anti-immigrant base while winking to the Chamber of Commerce that they really aren’t going to stop business from hiring migrant workers. Shameful hypocrisy.

    3. I completely agree with Zanon. As long as we are going to have public services and a generous social safety net (e.g. education, emergency room care, subsidized housing, subsidized food, use of freeways and subsidized public transportation), we need to build a fence to keep people out. Contrary to the claim that illegals are keeping our fruit and vegetable prices low, when you add up all of the public resources that are used, it is pretty clear that a minimum wage worker is a net drain on the resources of US residents.

      I think we have a moral obligation to allow some immigration, and immigration at some level, even of low productivity workers, is healthy for our society (and believe me, I love Hispanic culture and am trying my best to learn Spanish), we do have a right to control and monitor the immigrant flow.

      A fence certainly seems like a practical and moral option. Let’s stem the flow now and then develop some sort of amnesty program for those who remain. I’m not really sure what the argument is against a fence. It wouldn’t cost that much, and there’s no question that it would be effective. The Israelis have built a fence that keeps out suicide bombers. A suicide bomber has got to be a lot harder to stop than an average guy just trying to earn a living.

      I agree with Tom that the War on Drugs has got to end. It is probably one of the stupidest bipartisan policies we have.

      I don’t agree with him that the GOP is guilty of shameful hypocrisy on the issue. There is pretty much a consensus in the GOP to seal the border. Cracking down on businesses which hire illegals sounds good in theory, but the implementation is difficult apparently.

  8. Cracking down on businesses which hire illegals sounds good in theory, but the implementation is difficult apparently.

    The thing is that lots of people know who the drug dealers in town are and who is hiring illegals but somehow the cops don’t. Seems to me that they don’t want to know for some strange reason, and they don’t do anything when they are told. I could go on about lax enforcement in other ways that are pretty mind boggling. But traffic violations, that’s another matter. There’s money in them thar hills.

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