How Dallas’ Economy Depends on Deficit Spending
In the print version of FrontBurner this month, I write about the exhorbitant cost of the nation’s military spending and how much of that spending props up our local economy. My example is the F-35. The Pentagon has ordered 2,500 of the new aircraft at a cost of $90 million each (in its basic form; in its more extravagent form, it could cost as much as $200 million each). If the new Congress gets serious about cutting the deficit, the F-35 is a very good candidate for the first round of cutting. But if that happens — and it won’t — it would cost Dallas thousands of jobs and send our local economy spiralling into a second recession. I use that example to show how entrenched military spending, and the empire it supports, has become in the civilian economy.
Financial analyst Mike Shedlock posts today on “Why the USA Is Broke,” incorporating a number of recent articles about how out-of-control military spending has become. His post is also a lead item on BusinessInsider. But what neither he nor the authorities he quotes addresses is this interlocking relationshp between the economies of 435 Congressional districts and the Pentagon. The costs of empire may break our backs, but even if we know it and want to reduce it, I do not see how it can be done. Certainly the Democrats have not done anything but rubber-stamp Pentagon spending. Does anyone expect the GOP to cut it?
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9 comments
Loved your article, Wick.
I hope the national debate about defense spending will move beyond the cost of toilets (remember that circa 1990?) to the ROI of maintaining the United States’ virtual and physical empire.
It’s interesting to note that that last significant reduction of defense spending in the late 80s and early 90s led private money and R&D from the defense community to Silicon Valley, and arguably led to the commercialization of the Internet and WWW.
The problem was that it was a economic shock to the system defense-oriented cities like Los Angeles. You’re right, Wick. It would be a shock to DFW.
While that is true sir, do you expect anything more from a Congress that can not pass a budget this late in the game? Another thing you can mention is the earmarks that made up that 2,000 page budget. I heard Sen. McCain read some of them and it just blows the mind!
Wick,
I read your piece in the print product and I was prone to write, but now that this is on FrontBurner, I’ll just comment.
Let me acknowledge a few things:
1. We should cut wasteful spending where we can. Plain and simple.
2. You make a good point about how important federal spending is to our local economy.
However, I think you’re missing some more significant sources of deficit creating spending. The biggest thing that comes to mind is entitlement spending. I refer you to this and this.
Just accentuate the point, have a look at this.
But entitlement spending probably has a different economic impact profile – and for that matter is a very different can of worms.
cutting defense spending isn’t going to solve the problem. one needs to tackle entitlements. that is where the big savings are
It’s so easy to throw around the word “entitlement” when think you mean “welfare queens.” But the reality is, entitlement spending means MEDICARE, as in, your parents. Your father’s pacemaker operation. Your mom’s hip replacement.
Oh, I’m sorry, that’s not what you meant? Uh huh.
Yes cutting Defense spending will help. However, what will help is avoiding problems like Congress passing another motion like this that funds us short term.
http://www.nypost.com/p/news/national/congress_averts_government_shutdown_8gzKNuGc5kGlR80kDG9zdI
@ Julie,
Yes, I completely understand “entitlements” include things like my parents medicare and social security. But it also includes the unfunded liabilities of MY medicare and social security. I can tell you I’ve never planned on having at least one of the two. If you think a SS trust fund exists, I’ve got another bag of goods to sell you.
Wick,
While I agree that the F-35 should be cut, I don’t see how that would cost thousands of jobs and send our city into a second recession.
Wouldn’t this money go to the Raytheon’s of the world who already employ tens of thousands of people? If so, then I strongly doubt they recently hired thousands of additional people in the hopes that they will get the F-35 money. But I digress…
This issue also points out the hypocrisy of John Corynyn. The man can’t go 5 seconds without railing against “government waste” (which even the Pentagon has admitted the F-35’s are), yet he also strongly supports this project due to the # of jobs it “creates.” Never mind the fact that he also says that the government cannot create jobs, this strikes me as the definition of hypocrisy.
The entire US defense budget is $782 billion. This includes $683 billion for military spending and $54 billion for the Dept of Homeland Security. The wars in Iraq and Afghanistan make up less than 4% of the total budget over the last decade.
The projected deficit for 2011 is $1.4 trillion, more than double the military budget, including the two wars.
Federal spending has increased by 40% across the board since 2007. Scaling spending back to those levels would be a great start in balancing the budget. The military budget will have to be reduced, unfortunately, because Congress has been so irresponsible for the last three decades, but don’t pretend that military spending is the culprit here.