Sunday, July 8, 2012

Defense Cuts Harmful to Economy or National Security?

SIC SEMPER TYRANNIS!!!
July 8, 2012




Antiwar.com
July 8, 2012



There are two doomsday scenarios Washington and their welfare recipients in the war industry are predicting if defense budgets get cut. The first is that the defense corporations will have to lay off workers and unemployment will increase massively, sending the country into another deep recession. The second is that we will be less safe. Both are completely untrue.
Politicians from both parties have been harping about perverse economic consequences of budget cuts for a while now. They want to keep giving out goodies to their local corporations and fear any dip in employment. But defense corporations are now joining in the public relations campaign. One recent study, “commissioned by a top defense and aerospace trade association” – namely, the Aerospace Industries Association and the International Association of Machinists and Aerospace Workers – found that “a new batch of planned Pentagon spending cut would cause 1 million jobs to be lost next year.” The National Association of Manufacturers, another lobby group,repeated this finding, adding that proposed cuts would “increase unemployment by 0.7 percent, and decrease gross domestic product by almost 1 percent.”
But, as Lawrence Korb et al have just written, these lobby groups kind of fibbed up their numbers:
Most of these jobs, however, would not come from the defense industry itself. To maximize their findings (and their political impact), both studies assessed the effects of defense sequestration on every sector of the economy that could be hit by “induced effects,” including secondary and tertiary effects like reduced consumer spending. As a result, the “1 million jobs” figure includes jobs in industries as distant from defense as “retail trade” and “leisure and hospitality services.”
And besides, Korb points out, “defense spending is not a jobs program.” At least, it’s not supposed to be. And the jobs that these rent-seeking defense corporations maintain only show what big business can do with diverted (read: stolen and redistributed to less productive sectors) wealth. As Cato’s Chris Preble wrote this week, “It’s easy to focus exclusively on the companies and individuals hurt by the cuts and forget that the taxed wealth that funded them is being employed elsewhere.”
Gordon Adams, who over saw defense budgeting for the Clinton administration, says the industry-commissioned study fails to account for “a whole bunch of other things.”
For instance, if the new cuts occur, Washington would be spending about $55 billion less than planned each year on the military.
“That’s $55 billion that wouldn’t just disappear into the ether,” says Adams. “There would be other economic benefits from borrowing $55 billion for defense.”
And finally, the proposed cuts to defense budgets (sequestration) are, frankly, puny. Overall defense industry profits have skyrocketed since 9/11 and the harshest scenario for defense cuts would put budgets back at about the 2007 level. But only after some time; after all, we’re talking here about a decrease in the rate of growth in projected defense spending. So budgets will still be growing. Just less fast.
The minuscule defense cuts being contemplated could easily target areas of waste. As a recent report from the Center for Strategic and Budgetary Assessments found, while the source of growth in annual defense budgets since 2001 has been mostly (54%) due to the wars in Iraq and Afghanistan, much of the rest has been spent on wasteful superfluous weapons technology, bloated salaries and benefits plans, and expensive peacetime operating costs for the 900-plus military bases in 130-plus countries around the world.

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