Follow us:

Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

January 30, 2012 at 9:45 AM

The Pentagon’s giant sucking sound

Those draconian Obama defense cuts are actually not. As Fred Kaplan reports in Slate, the real spending reduction proposed for fiscal 2013 is a mere 1 percent less than the actual spending in FY 2012. More details have yet to emerge, but the obvious winners are technology and special operations; the losers the ground forces.

And none of this accounts for the many hidden places for defense spending, such as the State Department, which is spending heavily on its own drone fleet and security contractors. According to the New York Times, 5,000 private security contractors, along with drones, are protecting 11,000 embassy employees in Iraq alone. Mission accomplished.

Mr. Obama’s line about using money spent on wars for nation-building at home was also a bit disingenuous. The $1.3 trillion-and-rising cost was mostly borrowed, including from China. Conservatively, the United States spends more on its military than the next 14 biggest military powers in the world. This is Ike’s Military Industrial Complex in full flower. It distorts the economy and until its really addressed, America can’t recover and compete.

There are winners from the status quo, including big defense contractors such as Boeing. While we’ve allowed our high-tech manufacturing to migrate to Asia, America has actually increased its market share as the world’s largest arms merchant — often with catastrophic consequences in the many small wars you never read about. But this edifice is not as productive, not as constructive for rebuilding the middle class, or, as Eisenhower foresaw, not healthy for a democracy, as a more balanced use of national resources and focus.

Someday, the United States will need to restructure its economy for peaceful competition in a neo-mercantilist world, to meet the national-security threats (acknowledged by the Pentagon) of climate change and peak oil. Or debt or another misbegotten military adventure will force us to, on very unfavorable terms. What’s happening now is not making us safer. It’s making us poorer, and ultimately more at risk.

And Don’t Miss: Europe’s scariest chart || Zero Hedge

Today’s Econ Haiku:

Facebook IPO

Will make big money, not jobs

‘Like’ the Wall Street boyz

Comments | More in Aerospace/Boeing, Defense

COMMENTS

No personal attacks or insults, no hate speech, no profanity. Please keep the conversation civil and help us moderate this thread by reporting any abuse. See our Commenting FAQ.



The opinions expressed in reader comments are those of the author only, and do not reflect the opinions of The Seattle Times.


The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Subscriber login ►
The Seattle Times

To keep reading, you need a subscription upgrade.

We hope you have enjoyed your complimentary access. For unlimited seattletimes.com access, please upgrade your digital subscription.

Call customer service at 1.800.542.0820 for assistance with your upgrade or questions about your subscriber status.

The Seattle Times

To keep reading, you need a subscription.

We hope you have enjoyed your complimentary access. Subscribe now for unlimited access!

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Activate Subscriber Account ►