THE US NATIONAL DEBT April 21, 2011Posted by wmmbb in Social Environment, US Politics.
I was looking for a relatively simple explanation for the ballooning US budget deficit (as distinct from the trade deficit). It seemed to me there is revenue on one side and expenditure on other.
Things, perhaps unsurprisingly, are not that simple apparently. First there is the scale of the deficit. According to BBC Business News in Asia:
The US government posted a record monthly budget deficit of $222.5 billion in February as spending growth outstripped revenue gains that were crimped by tax cuts enacted late last year, the Treasury Department reported on Thursday.
The budget gap for February — typically a large deficit month — beat the previous record of $220.91 billion set in February 2010. But it came in under the consensus forecast of a $227.5 billion gap from analysts polled by Reuters.
The Treasury said the cumulative deficit through the first five months of fiscal 2011 was $641.26 billion, down from $651.6 billion in the same period a year earlier.
And then You Tube videos are supposed to make things easier to understand:
An editorial in The New York Times says [it is time to cut military expenditure as the biggest area of wasteful government spending rather than demanding sacrifices of the most vulnerable]. And then the editorial considered the headings: force structure, personnel and procurement. The editorial writers did not take into account what Chalmers Johnson described as “the empire of bases” or the monetary costs of waging war. The purpose of wars seems to be to secure bases.
At Truthdig, Robert Scheer takes issue with the fact that the beneficiaries of this expenditure are making commutatively little or no financial contribution. He cites General Electric, which it is claimed pays no taxes but was also a beneficiary of the bailout. He writes:
Of course it will be argued that multinational corporations have the right to arrange their business as they see fit in order to maximize profit. But if that is the case, do beleaguered American taxpayers have to foot the bill? When those corporations run into trouble overseas because of financial hustles or hostile locals and need the diplomatic and military might of the U.S. government to protect their interests abroad, it is again the U.S. taxpayer who must pay to maintain this new world order. It is an order, as we see with three current wars and a military budget that rivals Cold War highs, that is contributing mightily to the U.S. government debt. More than half of all discretionary spending, the dollars that the Republicans in Congress now want to take out of needed domestic programs, is accounted for by defense spending. That defense spending to support a massive network of military bases and deployed weapons and troops is key to establishing an order in which the interests of American corporations are attended to. If the companies don’t feel that way, let them operate under the flag of Liberia or the Cayman Islands.
No less important than U.S. military muscle is the power of the American government to construct and enforce a worldwide trade and finance structure to the advantage of U.S.-based multinational corporations. That is why the companies spend so much money lobbying Congress on matters ranging from regional trade agreements to international banking regulations. It is precisely the impact of trade agreements like NAFTA that has facilitated the erosion of well-paying jobs. And it was the deregulation of international banking standards, led by the U.S. Treasury Department under the past five presidents, that created the conditions for the recent disastrous housing and banking meltdown.
E J Dionne (via Truthdig) applies a class analysis. He writes the American ruling class has stopped being concerned with the welfare of the society and become obsessed with having more money. He does not explain why or how that happened. For what it is worth, I suspect that it can be related to the end of the Cold War and the fall of the Soviet Union, thus removing a competitor that placed constraints on the natural avarice intrinsic to the operation of capitalism. E J Dionne concludes by quoting Theodore Roosevelt:
“A blind and ignorant resistance to every effort for the reform of abuses and for the readjustment of society to modern industrial conditions represents not true conservatism, but an incitement to the wildest radicalism.”
A Marxist analysis might go along way to sorting things out. There is then the problem of empire, as Tom Engelhardt suggests. Empires seem inevitably to overextend and then topple and implode. Their fate is to fade away and what does not wither becomes absurd. A case in point is the so-called “royal wedding” which our dear leader is jetting across the world to join the circus of celebrity – despite the terrible effects it seems to have on the people involved.