OC Political

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John Campbell: Biggest national-security threat is debt

Posted by Newsletter Reprint on March 23, 2012

This article from the Orange County Register just came across the wire from the Campbell for Congress campaign. It is actually a really good read:

John Campbell: Biggest national-security

threat is debt

By JOHN CAMPBELL

2012-03-22 15:11:03

As conservatives, we are always trying to reduce federal spending because there is a lot of waste and inefficiency in government, because more government spending often does not result in better outcomes, and because there are many things the federal government simply should leave to “the States respectively or to the people,” as the 10th Amendment instructs.

Clearly, spending for the “common defense,” enumerated in the preamble to the Constitution, is one of the unassailed responsibilities of the federal government. No argument there.

But, why is it conservative orthodoxy to assume that defense spending is immune from waste and inefficiency or that more spending in this area alone is always better? It shouldn’t be. It is inconsistent and wrong. Defense spending should be subject to scrutiny for cuts just like any other type of federal expenditure.

For example, there are now 800,000 civilian Defense Department employees – 800,000 people not in uniform or carrying a weapon. And, that doesn’t include employees of defense contractors. That number is not available because we don’t audit the Pentagon, which is another issue.

Some people estimate that the contractors employ a similarly large number of employees entirely through our defense spending. If that’s true, then the civilians working in some way for the Defense Department would outnumber the 1.4 million uniformed members of the Armed Services.

That makes no sense. That is a huge bureaucracy that military personnel tell me does more to get in the way of their duties than help.

Many defense-spending hawks will point out that our Navy now has the smallest number of ships since 1914. OK. What relevance does this have? At the outbreak of World War I, potential European foes had large navies that represented a legitimate threat. Today, we have 10 supercarriers. That is over three times more than the rest of the world combined, including our allies! And, the three foreign fleet carriers are refurbished versions of decades-old ships.

Instead of recapitalizing our existing fleet of Humvees at a much lower cost, we are spending billions developing a new Joint Light Tactical Vehicle with slightly upgraded mission capabilities.

Some people say we need a new strategic bomber to replace our aging B-52s without considering the reduced credibility of the deterrent threat of long-range bombers in an age of missiles and drones.

In no way do I want to reduce the capabilities of the Armed Services to fight existing threats or cut uniformed military pay or benefits. But, throwing more money and equipment at weaponry or strategies to counteract threats that no longer exist makes no sense.

Furthermore, we face another threat, which is much more likely to cause serious damage to U.S. prosperity, hegemony and security than any foreign army. That threat is our huge national debt. Throughout history, great nations have fallen economically before they have been conquered militarily. The most recent example is the Soviet Union, largely brought down by economic, rather than military, failure.

We must get these debts and deficits under control or they will bring us down more quickly and conclusively than anything else.

We can defend the country for less. We can reduce spending and waste without reducing capability to counter threats. And, we must do so. Not only because no element of the budget should be immune to cuts when you are spending 30 percent more than you are taking in. But, also because it is hard to argue that there is waste and cuts to be made in social programs, but zero waste in defense or homeland security. More spending does not necessarily yield better results.

2 Responses to “John Campbell: Biggest national-security threat is debt”

  1. Dunphy said

    Why did Campbell vote for TARP then??

  2. met00 said

    Balancing a budget requires two equally important aspects. One is spending and the other is income. When one, or the other, is out of balance, you get debt. Now debt, of and by itself, is not “bad”.

    For instance, how many of us put 100% cash down for our homes? Very few indeed. Most of us leveraged the “value” of the asset (most 80% or more) and put down a small portion of assets to cover the total cost, thereby assuming debt.

    This was a good deal when property was headed “up”, but as the housing market downturn taught many, sometimes the value of the asset goes down and you find yourself “underwater” with the current debt greater than the value of the asset.

    So, almost all homeowners are familiar with debt loaded financing, and to them it is not “bad”, but it is “good” as it allows them to own property and have a home of their own.

    So, what is bad debt? Bad debt is when you decide to take out an equity line of credit and purchase a new motorcycle. Here you are extracting debt from one asset to purchase another that will lose value over time, and there is a great possibility that in the end you will not have the asset that lost value and still have the debt.

    On the other side of the scale is income. As we work and gain experience we generally see increases in income. If things get tight a person might even take on a second job to increase income. This income can then be used to decrease debt or to invest (make your money work for you) based on where the asset would gain the greater return (if your debt is at 18% and investment will get you 8% you pay off debt, if the debt is at 4% and investment will get you 8% you invest).

    So what has been happening for the last 12 years (I am only going back to 2000, if I went back to 1980 it’s even worse). The amount of income being generated by the government has been dropping due to changes in the tax code. More income, and a larger amount of assets, are going to the top than ever before. Corporate taxes have dropped substantially. As income has dropped, predicated on the failed theory of the Laffer Curve (trickle down economics), the debt to income ratio has become lopsided, resulting in a increase of debt over time.

    At the same time as income has been dropping, so has spending. In fact, during the last three years the size of the federal government has actually declined substantially. The only place in the Federal Government where income has not declined in any measurable comparable term has been in the Department of Defense.

    So, if spending has declined what is the problem? The problem is clearly spending has not declined at the same pace as income.

    Now, when the income tax system was revamped in 2001 it was done with certain specific promises made on what the results of the changes would do. First off there was the promise of increased employment. Then there was the promise that the reductions would actually spur tax growth (make more income) and lastly the promise of renewed investment (creating more jobs). The end result of 12 years is that not one of these promised things actually happened. The promised jobs did not appear. The promised renewed investment did not happen. And worst of all the theory that giving the people at the top more would create more overall income was proven to be empty.

    Historically, looking at the last 100 years or so, we can see when the tax system was progressive rather than flat the government was able to invest in programs and projects that created not only jobs, but innovation and manufacturing. A great example of this type of investment would be NASA’s effort to put man on the moon. If you know anyone who has had some form of microscopic surgery they are a beneficiary of the money that was spent by NASA..That computer you are reading this post on… NASA again. That flat screen TV? NASA. That non-stick pan? NASA. Tang (okay, that was meant to make you smile).

    The point here is that the government can invest in massive projects that pour out tons of inovation and jobs, but only if they have the income to do so. Which brings us back to the present and the debt that John Campbell is so interested in discussing.

    The tax code changes since 1980 have been drastic at reducing the income of the government, hampering the governments ability to fund innovation as well as meet the current debt obligation. The answer is not to institute more austerity measures to reduce spending, which has been reduced in many ways, but to return to a tax code the was fair, allowed business to operate, allowed people to be rewarded for their creation of business and economic opportunities for others, and allowed the government to generate enough income to not only pay to run the country, but also to take the big risks and innovate.

    If John Campbell wanted to correct the current imbalance he would have to look no further than Republican President Dwight D. Eisenhower. The DDE tax code was supported by Republicans, it not only led to balanced budgets, but also provided enough money that Kennedy was able to take NASA for a dream opportunity. If John Campbell was serious about correcting the fiscal problems facing America he would be the first in line to propose that we return to the DDE tax code, adjust all the dollar figures for inflation, and re-institute it as the US Tax Code. .

    Not only would this immediatly balance the budget, it would create a budget surplus which would allow us to pay off that debt that John Campbell is so concerned about. And it might even allow the government to get back into the business of funding impossible programs, like putting a man on the moon, that lead to massive innovation and growth of the middle class.

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