Tuesday, July 15, 2008

Don't Blame the War

UPDATE: below

Lefties often argue that our economic woes are a product of Defense spending, particularly in Iraq. This ignores the fact that the Federal budget was, until recently, rapidly moving toward balance. And radical lefties like Robert Scheer equate any military procurement with "pumping up the profits" of Republican defense industry donors, and thus--per force--"a betrayal of the public trust."

To some extent, this is just Stalinist "progressive" pacifism. But this view also is delusional--it ignores the actual engine of spending growth: entitlements. Entitlements are, essentially, payments to citizens via programs like Social Security, food stamps, unemployment insurance, Medicare and Medicaid.

Decades ago, defense did dominate Federal spending: in 1962, defense took just under 50 percent of total outlays. But entitlements are "the fastest-growing programs." In 2006, about 60 percent of the budget went to payments to individuals. As MaxedOutMama has detailed, the seven largest entitlements (including retirement payments for Federal workers) will consume three times their share of total GDP in 2016 as compared with 1962. The big three alone--Social Security, Medicare and Medicaid--claim 42 percent of this year's budget.

Here's a couple of graphical representations. According to the budget-hawk Concord Coalition, current outlays (using 2007 data) break out as follows:




source: Concord Coalition page 2


A "pie" chart of the same data that excludes interest payments:




source: NOfP chart based on Concord Coalition page 2


The Office of Management and Budget's historical data (produced in connection with the FY09 budget), clearly highlight the half-century trend:




source: NOfP chart based on Office of Management and Budget, FY09 Budget, Table 8.3

Conclusion: The war on terror isn't free. But defense spending has fallen over time. Today, entitlement outlays chew-up nearly three times the budget expenditures of discretionary defense spending. Income transfers, not Iraq, are the major budget busters. Will Bush-hating progressives ever acknowledge this reality?

MORE:

A chart by John Cogan and Glenn Hubbard, published in the Hoover Digest:




source: The Hoover Institution


MORE & MORE:

Assistant Village Idiot made a similar point last year.

(via National Review's Peter Robinson)

3 comments:

MaxedOutMama said...

No, Carl, they won't.

OBloodyHell said...

> the Federal budget was, until recently, rapidly moving toward balance.

MMM, I suspect that this claim ignores defacto obligations which aren't acked as being obligations. Namely, Social Security and all the other "pension" plans, none of which have any real "savings" anywhere, but which the Fed is certainly obligated to take care of. The amount of these is a damned sight more than the amount claimed by anyone in the government -- and a hell of a lot more than 1+ percent.

Carl said...

OBH:

I don't disagree, but know no other measure for historical comparisons. Besides, do you really question that--whatever the magnitude--the budget balance was improving until recently?