Levin Does His Job

warned on Sunday that those employed in the defense industry should be worried about the possibility of sequestration.

I bet our defense/industrial complex could do a pretty good job repairing our infrastructure. Roads and bridges, schools and levees, not bombers and tanks. They’d have to learn how to compete though; the free-market would be a hell of a shock, wouldn’t it?

I didn’t see the show so I’m not going to weigh-in on Sen. Levin’s argument as presented here for one reason. It is feasible to defend no defense spending cuts in the short-term for the same reasons people like me rallied around the 2009 stimulus having a component that lowered the number of state employee lay-offs. Saying “no, not now” while still siding with Ed that we spend far too much on defense (and probably intelligence as well) can be a consistent position. I do think the right answer is immediate cuts now rather than none, though modest ones which won’t have any or only a little deflationary impact.

I think the following items in the order presented here should be the priority to getting some sanity back on managing the federal debt:

1) What optimizes economic growth. Probably more investments, so now I’ve increased the debt in the short-term.

2) An increase in the effective rate nearly all individuals pay (not companies); specifically consumption, which will never happen therefore instead: income, and estate taxes but not on capital or businesses. People rightly rail on Bush cutting the taxes of the top-earners, but he also caused us harm by cutting all the rates.

3) Defense spending cut

4) Eradicating subsidies not in the national interest, e.g., the encouragement of coal and oil consumption given their negative external costs.

5) Increasing embedded taxes on the supply chain of goods and services which have negative external costs to eradicate the taxpayers paying for those external costs, e.g., coal, oil.

4) Cuts on programs which are obsolete or not providing a good return-on-investment.

5) Entitlements should be off the table.

The economy is fragile, especially with the state of Europe and even China. So cuts in defense should be big but scheduled out a bit.

Well…I work at a company in which about half of the business is defense contracts (happily, I do not work for that half of the company), and the company is certainly worried. And I know people who work in that half of the business are worried about their jobs. I can’t blame them as I’m talking primarily about my fellow engineers. They are reasonable paying jobs and it wouldn’t be easy to find an equivalent job without having to relocate to a different city. But, sorry to say to those people, our military spending is ridiculous.

Thanks Michael @ #3. I’ve not agreed generally with your taxation policy points in the past but they were generally about the narrow advisability of one particular tax or another. I could support your entire package, however.

I’m currently fearing the WhiteHouse is already weakening its public position and the (R) are all but demanding the middle class (people with a mortgage interest deduction and similar) pay for the ‘tax loophole’ closing plank.

The current WH suggestion on military spending is to not make more than token cuts and otherwise leave it flat (way elevated vs clinton’s time).

“We account for nearly 50% of all the military spending on the entire planet, for crying out loud.”

Well the USA has to be prepared to go to war with the whole rest of the world at once, if those other nations won’t do what the US government (i.e megacorporations speaking through US government) tells them to do. You’re also forgetting about the evil empire of the United Nations, which has its own enormous military forces and weapons completely separate from what any other entities may possess. So the USA is already outnumbered before the shooting even starts. And I heard the UN is getting its own death star!

And don’t forget most of those other nations got their weaponry from the US in the first place, so the US has to stay ahead of them in weapons technology. The US needs all that “defense” spending. How else ya gonna defend the shining city on the hill?