Buying time on defense spending
Wednesday, November 3, 2010 at 8:29AM 
WSJ story from 22 October. It was the chart that caught my eye.
Per a post I should have out later today at Esquire, most experts don't see the GOP takeover of the House impacting defense spending all that much, even though it's the biggest (now at just under 20% of the Feb budget) discretionary item at over $700B in 2010.
The Tea Partiers, most notably the new senator from Kentucky, Rand Paul, say there's plenty of waste to be cut. But with Gates already earnestly trying to clip $100B over five years, it's hard to see the House coming after the Pentagon while Iraq is winding down and Afghanistan remains hot.
The longer-term problem: what drives a lot of defense growth is the same thing driving Medicare's similar trajectory: higher medical costs.
Tony Cordesman at CSIS says Gates' efficiency drive only buys time in the face of these twin internal and external pressures. In my mind, that reality makes Obama's efforts to reform healthcare look less "out there."
I am one who thinks Europe's current struggles with budgets, pensions, defense cuts, etc. are a harbinger of what we eventually end up doing. Our engagement with the world will be deemed "excessive" (Barney Frank's term) in light of all this fiscal tightness.
And then how China inevitably steps into that void, and how we interpret that trend, will determine much.
That's why the sad state of Sino-American mil-mil cooperation could turn out to be a decisive non-enabler of what should have logically followed.
Reader Comments (3)
I'm at an international meeting this week and one comment that came up over coffee was the respective casualty rates for various nations contributing to Iraq and Afghanistan. I asserted and it was generally accepted that US fatality rates were substantially less due to the investment the US has made in force protection. But as a result, we're getting higher non-fatal casualty rates with particularly expensive long-term obligations, e.g. amputations, head injuries, etc. Plug that into the "generic" growth rate in medical expenses, and that's a double whammy on medical costs as part of the Defense/VA budget growth.
My sense is that the 'cuts' will come in the form of private sector analysis of efficiency. E.G. Newt's idea that Visa would do a better job of managing social security info and service cheaper while making a profit that current government team.
The challenge will be the unions who protect their jobs in an age that can't afford bureaucratic inefficiency.
The drama continues....
My wife and I were in France a few years ago when controversy was raging over their having to give up the Franc and adopt the Euro. They didn't like it. I don't think the French people ever wanted to be in the E.U. The French have a different way of doing things. They "vote" in the streets. It seems crazy to us but that is how they do things. The 'strikes" are not haphazard. When the French government does something that offends a particular interest group...that group takes to the streets. We tend to wait for election day and then we punish individual office holders. Of courses we replace them with folks who are then immune from our anger until the next election day rolls around. I am not sure that our system is better. Not anymore.
The French blame the E.U. for trying to keep them working until they are old and frail. The Germans are mad (they are Germans) because the French won't tighten their belts. The Irish, now suffering a national hangover after drinking the Celtic Tiger cocktail, are sorry they ever heard of the E.U.
As for here....
The first Children's Crusade, in 1212, ended when the young Crusaders reached the sea and it failed to part (as promised) so that they could walk t the Holy Land. The young Crusaders became disillusioned with their leader. I challenge anyone to top that analogy.