USA Debt Rating Downgrade to AA+ is from our failure to cut defense and entitlements

S&P’s decision to downgrade the US debt rating from AAA to AA+ is very unwelcome news but it should not surprise anybody, especially in Washington where neither party has been willing to tackle the deficit or the debt in a responsible manner.

It’s time to cut the only two things in the budget that really matter – the bloated portions of Defense and Entitlements.    Even estimating (and then cutting back) the bloat at 10% – absurdly low given how recklessly this money is spent – we could solve all deficit and debt problems in less than a decade.   DO IT, DAMN IT!

The Tea Party’s was right that debt and deficit are major concerns, but their approach to solving the problem has been almost infantile, lacking in strategy as well as substance.    They won’t cut defense – clearly required to solve this problem unless you raise taxes which as they correctly note brings a host of other problems into the mix.   Defense spending is so high it’s become counterproductive, creating blowback and international tension which is mostly a function of our own reckless big spending in hostile territory.

One does not have to be an isolationist to see that it’s time for a much more strategic spending focus.   Troops can be paid well and protected – these portions need no cuts, but operations and maintenance budgets in each of the services are where the big money lies, and where the big cuts won’t create trouble for policy or troops.

The solution is pretty obvious to many of us out here in the real world, where two things are crystal clear:   1.  Entitlements are out of control.  The prosperity the USA has enjoyed for over a century as the kingpin of the  industrialized world is winding down in favor of spreading the wealth around the globe, especially to the developing countries of China and India.   This prosperity allowed us (and by “us” I mean everybody – from poor to rich) to enjoy health, welfare, education, and retirement benefits the rest of the world could only dream about.      Liberal middle class folks are whining too much about how they might lose benefits they never paid for – much of this in the form of “defined benefits” where their contributions won’t match their benefit so it’ll have to come from future taxpayers.   Social Security has this problem, but it’s easy to solve by lifting retirement age a few years for those who can afford the wait  OR doing a ” means test”  OR taxing higher income beneficiaries.   If we do nothing the Social Security trust fund will run out in under 20 years according to most estimates.      The fund is actually growing now but demographics in the form of fewer workers and more recipients will soon overwhelm the system.   Unlike a well managed system, Social Security has promised more benefits than incoming payments can support.

Summary:   Simple solution is to cut bloat in the two big ticket items of defense and entitlements.    Problem solved, AAA restored.  DO IT.

Obama’s ONE mistake may be his ONLY mistake, but it’s still a BIG mistake.

How is Obama doing?   I remain a big fan of how Obama has approached international diplomacy, basically speaking softly without putting down the carrots and big stick that America probably needs to wield to avoid international meltdowns.   (We could do this carrot and stick work much more cheaply using more carrots and less sticks with new school technology, media,  marketing and innovation, but that’s another post).

In fact it is hard to imagine what Obama critics would be saying if  Obama had actually failed at something (aside from massive spending, a very legit concern.   But spending cuts require BOTH  entitlement and military cuts first, and that’s not going to happen because neither right or left will accept smart spending.     That Government that spends best, spends least.    There are few if any exceptions, and all the founders are rolling in graves right now as they note how bureacratic insanity has inflated budgets to unsustainable levels. Yet the Tea Partiers fret over the trivial spending on stupid things and ignore the massive waste, fraud, and abuses within our 550 billion annual defense budget – clearly the obvious target for massive reforms since it does NOT sustain infrastructure, it only (theoretically) protects it.

The Obama Record:   Obviously too early to say but the results so far are remarkable:

* Economy stabilizing after potential catastrophe.

* Most banks to repay all bailout money (a story that should be headlines, but does not suit the naive agendas of tea partiers, left wing, or even mainstream folks. Geitner’s plan is not completed, but appears to have been masterful.

* No major terror attacks in US or even internationally.

* Iraq improving.

* Afghanistan unclear, but early signs of improvement.

Aside from the very important and reasonable criticism that we may have simply bought our way out of all this with massive spending, what’s the beef of the critics?     They predicted economic collapse and international terror at unprecedented levels.   We’ve had neither.   Obama’s doing fine.

We should have worked harder to balance current federal and state budgets with massive military and entitlement cuts, but the Tea Party raving fringe combines with the Democratic spendthrifts and won’t allow that obvious solution.

Without massive military spending cuts, we have a completely unsustainable spending pattern. Until the fools that pretend to be conservative recognize this totally obvious fact, the US remains economically challenged.

P.S.  Sorry kids, my generation is spending your money.   A lot of it you’ll have to repay with huge future taxes and/or massive inflation.   And you don’t even know it.   Cya.

You call the $13 billion in pork barrel projects wasteful spending? It’s a whimper to the Military’s Bang Mega-Budget!

Taxpayers, many in Congress, and all three presidential hopefuls are all ranting against the stupidity of earmarking in congress – the process AKA porkbarrelling where congress people insert unnecessary projects into spending bills and/or other legislation such that we taxpayers pay for projects that are usually wasteful and sometimes scandalous.    Alaska’s “Bridge to Nowhere” is the current poster child, which was allocating tens of millions to build a bridge that would service a tiny Alaska village of something like a few dozen people.

Yes, of course these projects are stupid, but to focus on them to the exclusion of the _real_ waste in Government spending is nonsense.    It’s like complaining that the president makes $400,000 a year when he would work for less.    This earmark money is *chump change* in a federal budget of trillions, where the things we should focus on are how to reduce the insanity of spending too much on wasteful social services projects (insert pretty much any one here) and most importantly our military budget, which is incomprehensibly large and incomprehensibly foolhardy:

Military $550,000,000,000.     Over half the world’s military spending is ours, and much of it is unnecessary.   Note the current Air Force tanker fleet fiasco where on the one hand Democrats argue this staggering contract should go to more expensive Boeing which as a US company would preserve more jobs, while Republicans argue who knows what about this.    The right answer is scale this back – significantly – because US security no longer depends on massive capitalized military juggernaut.    If there is a *single* lesson we should learn from Iraq it is that the USA cannot use massive military superiority to keep the peace.   In fact Iraq may demonstrate the opposite – our massive superiority is one of the factors that insurgents use against us, and is a major reason that the Iraq government has little incentive to get their own military providing better security for the people of Iraq.    

But even if our trillions bring security to Iraq it has been a fools bargain.    The same spending for infrastructure improvements in USA and around the world would have changed the global landscape in a significant way – certainly more than even the most optimistic scenario for Iraq independence.

Contrary to some of the nonsense spouted by modern “conservatives” and many hawkish Democrats as well, the founders of the USA believed in low military spending, very weak federal control, and in very cautious global dealings.    Until we return to those sensibilities we risk everything with the continued reckless military (and social service) spending spree.     

Engineering’s Grand Challenges

The National Academy of Engineering has suggested a list of the world’s greatest and most important engineering challenges, and it looks pretty comprehensive to me.   If we can solve all these problems we’ll really be taking life on earth up a few notches and kicking some globally sustainable problematic butt.   

I hope they add a priority and ROI component here.    My feeling is that reverse engineering of the brain will lead to general Artificial Intelligence and very rapid solutions to most if not all analytical problems.   Thus I’d like to see us devote, say, 1/100th of what we are poised to squander failing to solve CO2 problems to AI research.     But even if we forego that notion it’s questionable to spend in engineering as we currently do, especially on huge military technologies of questionable effectiveness.

 Here are the Grand Challenges for engineering as determined by a committe of the National Academy of Engineering:

  • Make solar energy economical
  • Provide energy from fusion
  • Develop carbon sequestration methods
  • Manage the nitrogen cycle
  • Provide access to clean water
  • Restore and improve urban infrastructure
  • Advance health informatics
  • Engineer better medicines
  • Reverse-engineer the brain
  • Prevent nuclear terror
  • Secure cyberspace
  • Enhance virtual reality
  • Advance personalized learning
  • Engineer the tools of scientific discovery

Make Ads, Not War

As I’ve noted many times here I believe that our massive US defense spend is unwise, returning a fraction of the return we’d get by putting most of the annual approximately $500.000.000.000 spend into high ROI global and national development projects, pro USA marketing campaigns, and other infrastructure improvements.

Interesting to me was the number just cited for the 2008 global advertising spend –
486 billion, just shy of what we’ll probably spend on US military.   Global military is about 2x the US number, or approximately one … trillion … annually.   

For you  bogus-fiscal-conservatives-who-call-themselves-conservatives-but-believe-in-huge-military-spending you owe the world at least a 250 billion per year apology, because this military spend is so ineffective at obtaining the desired objectives that no business would ever tolerate it going into the future.  It’s tolerated out of ignorance and mathematical stupidity – the same foolishness that drives huge social spending.  I think the flawed logic generally spawns from the assumption that projects that *might* work to bring stability (e.g. war) actually will work.    Since many such projects often bring a negative or low return rather than the desired one, the ROI on our military spend is spectacularly low.   Vietnam, for example, was left in worse shape than if we had spent zero on that war, and it now appears that Iraq may wind up suffering the same fate.

So, I propose this:   Let’s try to corner the advertising market for a year with out half-trillion.   Instead of weapons, lets see how effectively a global advertising campaign  would sway global public opinion in our favor.    Think about it.   Every TV, every billboard, every radio, and all online ads are featuring themes favorable to the USA.   For every propaganda piece against us, our almost Orwellian media dominance would counter with wine and roses and happiness in the USA.   Maybe we could just corner half the global ad market but reserve a hundred billion to include lots of giveaways and promotions to butter folks up.   Free turkies, cheeseburgers, and flat screen TVs …

Oh, and then that last hundred billion would come close to solving all the major pressing infrastructure problems on earth.

A disclaimer –  I guess I’m only partly serious here.  We need to maintain an adequate defense, but current pork barrelling, inefficiency, and bad strategy have bloated the defense budget out of proportion with its return on the huge investment.   I’d guess we could cut it by at least 60% with no appreciable dilution of our US security, and we could *certainly* do this for a limited time with very little dilution in security but a huge benefit to infrastructure projects all over the world, which would create incalculable good will.   No, this would not solve all our problems.   My point is that it would solve more problems than our current use of the funds.