Monday, October 12, 2009

Balancing Act

Was It Worth It?

Bush the Elder went into Iraq with 500,000 troops. Bush the Younger couldn't muster 200,000. In the intervening years Bill Clinton balanced the budget. He did it by cutting the military.

The numbers show it. In "current" dollars -- dollars as we spend them -- national defense outlays fell from $299.3 Billion (in 1990) to $294.4 Billion (in 2000). In "constant" dollars -- corrected for inflation -- the number fell even more. Meanwhile, by both dollar measures, non-defense outlays of the federal budget increased.

Non-defense outlays increased less quickly than GDP. They fell from 16.6% of GDP to 15.4%. That's a reduction equal to 1.2% of GDP. But during that decade national defense outlays fell by 2.2% of GDP -- from 5.2% to 3.0%.

The numbers are from Table 453 of the Statistical Abstract of the United States: 2009.

Measured in dollars, military spending fell in the 1990s while non-military spending rose. Measured as percent of GDP, military spending fell significantly more than non-military spending. When we went back to Iraq, we had only one-third the troops.

In hindsight, maybe balancing the budget wasn't such a good idea.


The Arthurian said...

I want to generalize and say there were few good cuts to be made in military spending. Anyway, it is what it is. If a military hammer costs $6000, that's what it costs. Cutting the military budget is not gonna get us lower prices. It's gonna get us fewer hammers.

I want to generalize again. I want to say there are few good cuts to be made anywhere, military or non-military. It is what it is. We've used the phrase waste, fraud and abuse so often it's like one word now. But I don't think there's much waste fraud and abuse to be cut.

I don't think cutting the federal budget is the answer to debt and deficits. I think our money is all screwed up, too much red and not enough green. Too much credit-in-use, money that costs money to use. Excessive reliance on credit. Monetary imbalance. Errors of policy. Dunderheads.

The Arthurian said...

60 Minutes tonight did a story on medicare fraud, now estimated at $60B annually.

The most current 2009 budget deficit number I could find (here) is $1.42T, down from $1.58T and $1.84T.

$60B is 4.2% of the $1.42T deficit number. Not a small number, surely. We should eliminate it, surely. But it would barely make a dent. Subtract $60B from $1.42T, and $1.36T remains.

Even if we found a way to eliminate that $60B fraud at no cost whatsoever, it would not significantly impact the effects of that deficit.

On the other hand, maybe Medicare should shift $60B of its funding from payment for medical services to payment for fraud prevention.