Politifact: U.S. defense spending, measured against GDP, is near historic low

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    Aug 07, 2011 5:25 PM GMT
    What I find remarkable about this admission is how grudgingly they seem to make it. Of course in absolute dollars US spending is going to be at a historical high - but so is US GDP and income. Looking at absolute dollars is useless. That somehow the wars or defence spending are the cause of the deficits is a left wing (also believed by many on the right) trope that should die (just like how the US government spends much in foreign aid - it doesn't but most of the money shows up in charitable contributions):

    http://www.politifact.com/virginia/statements/2011/aug/05/randy-forbes/forbes-says-us-defense-spending-measured-against-g/

    Forbes said the U.S. defense budget stands at 3.6 percent of the country’s gross domestic product, a figure that’s "low by all historical standards."

    Forbes’ statement stems from a base budget for defense that omits spending for the operations in Iraq and Afghanistan. When those costs are factored in, defense spending comes to about 5 percent of GDP. Even at that higher level, spending is low compared to the post World War II era.
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    Aug 07, 2011 7:56 PM GMT
    usgs_line.php?title=Federal%20Deficit&ye

    If only that 1.4% were taken out between 2000 and 2008, the deficit as a percent of GDP would surely have been much smaller. icon_lol.gif

    Can't you say the same for Medicare and Medicaid? If defense is such a small part of the deficits, that is.

    350px-U.S._Federal_Spending_-_FY_2007.pn
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    Aug 07, 2011 8:07 PM GMT
    "Looking at absolute dollars is useless."

    Tell that to the Tea Party, who's nickeling and diming things like NEA, FDA and EPA.

    Why does defense have to necessarily grow with the GDP? I can see it for things like Medicare (more people in the economy = more sick people). But do we absolutely need to expand defense together with the economy? Other countries didn't need to do it.

    You must be a really good landlord.icon_lol.gif

    http://armscontrolcenter.org/policy/securityspending/articles/tying_spending_to_gdp_bad_policy/Arguing that defense spending is historically low as a percentage of GDP, and therefore must be increased, is a bit like a landlord arguing that because a tenant received a much-deserved pay raise, their rent should be increased automatically. If the United States devoted 37 percent of its GDP to defense today, as it did during World War II, then defense spending in today's dollars would be around $5 trillion. This level of spending is clearly unnecessary, but it highlights the methodological shortcomings of historical comparisons. If the American economy doubles in size, should American taxpayers be required to double the Pentagon's budget automatically? Should our grandchildren spend three times more on defense than we do today just because they are three times richer? The answer is a resounding "no."
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    Aug 08, 2011 12:10 AM GMT
    q1w2e3 said"Looking at absolute dollars is useless."

    Tell that to the Tea Party, who's nickeling and diming things like NEA, FDA and EPA.

    Why does defense have to necessarily grow with the GDP? I can see it for things like Medicare (more people in the economy = more sick people). But do we absolutely need to expand defense together with the economy? Other countries didn't need to do it.

    You must be a really good landlord.icon_lol.gif

    http://armscontrolcenter.org/policy/securityspending/articles/tying_spending_to_gdp_bad_policy/Arguing that defense spending is historically low as a percentage of GDP, and therefore must be increased, is a bit like a landlord arguing that because a tenant received a much-deserved pay raise, their rent should be increased automatically. If the United States devoted 37 percent of its GDP to defense today, as it did during World War II, then defense spending in today's dollars would be around $5 trillion. This level of spending is clearly unnecessary, but it highlights the methodological shortcomings of historical comparisons. If the American economy doubles in size, should American taxpayers be required to double the Pentagon's budget automatically? Should our grandchildren spend three times more on defense than we do today just because they are three times richer? The answer is a resounding "no."


    Of course you miss the point - I personally think that Defense spending should be and needs to be cut - the point however is that those who point to the wars as being the primary reason of the deficits - as I noted above, is simply wrong and a lie.

    I don't think that it need rise proportional to GDP but it is the things other than defense spending that have grown.
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    Aug 08, 2011 1:32 AM GMT
    If it's not THE reason for the deficits, it's a major part of of it.
    The true cost of the Iraq war: $3 trillion and beyond
    http://www.washingtonpost.com/wp-dyn/content/article/2010/09/03/AR2010090302200.html
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    Aug 08, 2011 1:38 AM GMT
    q1w2e3 saidIf it's not THE reason for the deficits, it's a major part of of it.
    The true cost of the Iraq war: $3 trillion and beyond
    http://www.washingtonpost.com/wp-dyn/content/article/2010/09/03/AR2010090302200.html


    Except that it's not. Historically spending is not significantly higher than usual - in fact the opposite - it's at a historical low unless you missed that point. It's the discretionary spending elsewhere that has grown faster than military spending.

    Yes, Iraq and Afghanistan interventions cost a lot in absolute dollars. No one is denying this point, but these are not the reasons for the situation in the US now and the unprecedented levels of spending - in both absolute and more importantly as a percentage of GDP.

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    Aug 08, 2011 1:46 AM GMT
    http://en.wikipedia.org/wiki/United_States_federal_budget#Cause_of_decline_in_U.S._financial_position
    Both economic conditions and policy decisions significantly worsened the debt outlook since 2001, when large surpluses were forecast for the following decade by the CBO. The Pew Center reported in April 2011 the cause of a $12.7 trillion shift in the debt situation, from a 2001 CBO forecast of $2.3 trillion cumulative surplus by 2011 versus the estimated $10.4 trillion public debt in 2011. The major drivers were:

    Revenue declines due to two recessions, separate from the Bush tax cuts of 2001 and 2003: 28%
    Defense spending increases: 15%
    The Bush Tax cuts (EGTRRA-2001 and JGTRRA-2003): 13%
    Increases in net interest: 11%
    Other non-defense spending: 10%
    Other tax cuts: 8%
    Obama Stimulus: 6%
    Medicare Part D: 2%
    Other reasons: 7%[2]

    Similar analyses were reported by the New York Times in June 2009,[52] the Washington Post in April 2011[53] and the Center on Budget and Policy Priorities in May 2011.[54] Economist Paul Krugman wrote in May 2011: "What happened to the budget surplus the federal government had in 2000? The answer is, three main things. First, there were the Bush tax cuts, which added roughly $2 trillion to the national debt over the last decade. Second, there were the wars in Iraq and Afghanistan, which added an additional $1.1 trillion or so. And third was the Great Recession, which led both to a collapse in revenue and to a sharp rise in spending on unemployment insurance and other safety-net programs."[55] A Bloomberg analysis in May 2011 attributed $2.0 trillion of the $9.3 trillion of public debt (20%) to additional military and intelligence spending since September 2001, plus another $45 billion annually in interest.[56]
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    Aug 08, 2011 1:49 AM GMT
    Let it suffice to say that we agree that military spending has to be cut, amongst many other things.

    1.4% of GDP x 10+ years approximates to a cumulative 10-15% of debt as a percent of GDP.
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    Aug 08, 2011 11:59 AM GMT
    q1w2e3 saidLet it suffice to say that we agree that military spending has to be cut, amongst many other things.

    1.4% of GDP x 10+ years approximates to a cumulative 10-15% of debt as a percent of GDP.


    This is all well and good, but again, we wouldn't have had these deficits or this substantial rise in debt if it were not for discretionary spending and entitlement spending given that based on historical standards defence spending is at a relative low. So yes, you can argue that defense spending should be cut - just as I do, given that every area of spending should be examined in detail, but the deficits are not the result of defense spending or even these two wars.
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    Aug 08, 2011 3:22 PM GMT
    riddler78 said
    q1w2e3 saidLet it suffice to say that we agree that military spending has to be cut, amongst many other things.

    1.4% of GDP x 10+ years approximates to a cumulative 10-15% of debt as a percent of GDP.


    This is all well and good, but again, we wouldn't have had these deficits or this substantial rise in debt if it were not for discretionary spending and entitlement spending given that based on historical standards defence spending is at a relative low. So yes, you can argue that defense spending should be cut - just as I do, given that every area of spending should be examined in detail, but the deficits are not the result of defense spending or even these two wars.




    I gotta hand it to you, you try really hard for your point of view. I don't know how you find such stretched and strained polls and graphs to make whats obvious to most of the world look wrong, but you certainly do try hard. That's commendable.

    But to stretch this point that "the deficits are not the result of defense spending or even these two wars" is a stretch way to far and you embarass yourself by making such a statement. You should think twice about trying to change facts to suit your political ideology.

    Our Nations finances were in good shape untill the war expenses and untimely tax cuts for the Corps and the Nations wealthiest came about. (WHERE ARE THE JOBS THOSE TAX CUTS WERE TO PROVIDE ?) Our nation spends more than a large share of our allies all put together do, in all of history many nations came to their end by overstretching their military, that same can happen to us. Military isn't the only problem but it is one of the biggest budget problems we have with our deficit.

    Social Security is not a deficit problem because it is subscriber funded, not funded by the government. all that needs to be done there is raise the threshold for collecting payroll deductions from $98,000 to $120,000 of income and the problem is fixed. Then pass a law forbidding Government from taking from those funds as has been repeatedly done in the past.

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    Aug 08, 2011 3:27 PM GMT
    realifedad said
    riddler78 said
    q1w2e3 saidLet it suffice to say that we agree that military spending has to be cut, amongst many other things.

    1.4% of GDP x 10+ years approximates to a cumulative 10-15% of debt as a percent of GDP.


    This is all well and good, but again, we wouldn't have had these deficits or this substantial rise in debt if it were not for discretionary spending and entitlement spending given that based on historical standards defence spending is at a relative low. So yes, you can argue that defense spending should be cut - just as I do, given that every area of spending should be examined in detail, but the deficits are not the result of defense spending or even these two wars.




    I gotta hand it to you, you try really hard for your point of view. I don't know how you find such stretched and strained polls and graphs to make whats obvious to most of the world look wrong, but you certainly do try hard. That's commendable.

    But to stretch this point that "the deficits are not the result of defense spending or even these two wars" is a stretch way to far and you embarass yourself by making such a statement. You should think twice about trying to change facts to suit your political ideology.

    Our Nations finances were in good shape untill the war expenses and untimely tax cuts for the Corps and the Nations wealthiest came about. (WHERE ARE THE JOBS THOSE TAX CUTS WERE TO PROVIDE ?) Our nation spends more than a large share of our allies all put together do, in all of history many nations came to their end by overstretching their military, that same can happen to us. Military isn't the only problem but it is one of the biggest budget problems we have with our deficit.

    Social Security is not a deficit problem because it is subscriber funded, not funded by the government. all that needs to be done there is raise the threshold for collecting payroll deductions from $98,000 to $120,000 of income and the problem is fixed. Then pass a law forbidding Government from taking from those funds as has been repeatedly done in the past.



    Sorry, the only one embarrassing themselves here is you by an inability to see the math. Social Security is significantly underfunded - because it's not even funded by all because the government has spent all the surpluses.

    Again, military spending isn't even remotely part of the problem but can be part of the solution which is the point. The nation's finances were not in good state even prior to the wars - the entitlement spending has been a looming issue by sheer demographics.
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    Aug 08, 2011 3:48 PM GMT
    riddler78 said
    realifedad said
    riddler78 said
    q1w2e3 saidLet it suffice to say that we agree that military spending has to be cut, amongst many other things.

    1.4% of GDP x 10+ years approximates to a cumulative 10-15% of debt as a percent of GDP.


    This is all well and good, but again, we wouldn't have had these deficits or this substantial rise in debt if it were not for discretionary spending and entitlement spending given that based on historical standards defence spending is at a relative low. So yes, you can argue that defense spending should be cut - just as I do, given that every area of spending should be examined in detail, but the deficits are not the result of defense spending or even these two wars.




    I gotta hand it to you, you try really hard for your point of view. I don't know how you find such stretched and strained polls and graphs to make whats obvious to most of the world look wrong, but you certainly do try hard. That's commendable.

    But to stretch this point that "the deficits are not the result of defense spending or even these two wars" is a stretch way to far and you embarass yourself by making such a statement. You should think twice about trying to change facts to suit your political ideology.

    Our Nations finances were in good shape untill the war expenses and untimely tax cuts for the Corps and the Nations wealthiest came about. (WHERE ARE THE JOBS THOSE TAX CUTS WERE TO PROVIDE ?) Our nation spends more than a large share of our allies all put together do, in all of history many nations came to their end by overstretching their military, that same can happen to us. Military isn't the only problem but it is one of the biggest budget problems we have with our deficit.

    Social Security is not a deficit problem because it is subscriber funded, not funded by the government. all that needs to be done there is raise the threshold for collecting payroll deductions from $98,000 to $120,000 of income and the problem is fixed. Then pass a law forbidding Government from taking from those funds as has been repeatedly done in the past.



    Sorry, the only one embarrassing themselves here is you by an inability to see the math. Social Security is significantly underfunded - because it's not even funded by all because the government has spent all the surpluses.

    Again, military spending isn't even remotely part of the problem but can be part of the solution which is the point. The nation's finances were not in good state even prior to the wars - the entitlement spending has been a looming issue by sheer demographics.




    What ?? LOL !!! You need to re-read what I wrote about fixing SS, there's not a thing wrong with the math, there have been major studies done to back up what I wrote (look it up by Googling the subject) which is what needs to be done. SS doesn't come out of the US Budget, the funds come from subscriber payroll deductions so should not be part of this deficit discussion. Yes the Government has robbed SS coffers, That should stop.



    and you can no more divorce the Military/wars from the deficit problem than you can divorce all the waste in other discressionary budget line items. What the hell is your point to even try to pass this one off as logical. ?? Your smarter than this riddler.
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    Aug 08, 2011 3:57 PM GMT
    realifedad said
    riddler78 said
    realifedad said
    riddler78 said
    q1w2e3 saidLet it suffice to say that we agree that military spending has to be cut, amongst many other things.

    1.4% of GDP x 10+ years approximates to a cumulative 10-15% of debt as a percent of GDP.


    This is all well and good, but again, we wouldn't have had these deficits or this substantial rise in debt if it were not for discretionary spending and entitlement spending given that based on historical standards defence spending is at a relative low. So yes, you can argue that defense spending should be cut - just as I do, given that every area of spending should be examined in detail, but the deficits are not the result of defense spending or even these two wars.




    I gotta hand it to you, you try really hard for your point of view. I don't know how you find such stretched and strained polls and graphs to make whats obvious to most of the world look wrong, but you certainly do try hard. That's commendable.

    But to stretch this point that "the deficits are not the result of defense spending or even these two wars" is a stretch way to far and you embarass yourself by making such a statement. You should think twice about trying to change facts to suit your political ideology.

    Our Nations finances were in good shape untill the war expenses and untimely tax cuts for the Corps and the Nations wealthiest came about. (WHERE ARE THE JOBS THOSE TAX CUTS WERE TO PROVIDE ?) Our nation spends more than a large share of our allies all put together do, in all of history many nations came to their end by overstretching their military, that same can happen to us. Military isn't the only problem but it is one of the biggest budget problems we have with our deficit.

    Social Security is not a deficit problem because it is subscriber funded, not funded by the government. all that needs to be done there is raise the threshold for collecting payroll deductions from $98,000 to $120,000 of income and the problem is fixed. Then pass a law forbidding Government from taking from those funds as has been repeatedly done in the past.



    Sorry, the only one embarrassing themselves here is you by an inability to see the math. Social Security is significantly underfunded - because it's not even funded by all because the government has spent all the surpluses.

    Again, military spending isn't even remotely part of the problem but can be part of the solution which is the point. The nation's finances were not in good state even prior to the wars - the entitlement spending has been a looming issue by sheer demographics.




    What ?? LOL !!! You need to re-read what I wrote about fixing SS, there's not a thing wrong with the math, there have been major studies done to back up what I wrote (look it up by Googling the subject) which is what needs to be done. SS doesn't come out of the US Budget, the funds come from subscriber payroll deductions so should not be part of this deficit discussion. Yes the Government has robbed SS coffers, That should stop.



    and you can no more divorce the Military/wars from the deficit problem than you can divorce all the waste in other discressionary budget line items. What the hell is your point to even try to pass this one off as logical. ?? Your smarter than this riddler.


    Increasing the threshold will be insufficient for how big the short fall is. You can also google the critiques of those plans. Further, it doesn't reduce the fundamental issue that the surpluses are always being spent as quickly as they come in.

    As for the military/wars - you can divorce the issue from deficits looking at baseline spending - if you're looking for cause. Like I said - it's not the problem and it hasn't been. It can however be part of the solution.
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    Aug 08, 2011 4:05 PM GMT
    OK riddler, have it your way, the lions share of our nations economists could learn from you on this subject then. You need to inform them at one of their association meetings or at government budget meetings and bring them around to your reality. GOOD LUCK !!!
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    Aug 08, 2011 4:11 PM GMT
    realifedad said OK riddler, have it your way, the lions share of our nations economists could learn from you on this subject then. You need to inform them at one of their association meetings or at government budget meetings and bring them around to your reality. GOOD LUCK !!!


    Um - the oddity of your statement is that you're by far at the extreme of the views of the majority of economists. Something is going to have to change - and the S&P downgrade is only the first tangible warning. There have been many who have been pointing to the issue of rising spending for decades if only because of demographics. Further, it is Politifact cited repeatedly by a number of liberals here, that points out that military spending is at a historical low even after you include the wars.