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These sums are paltry compared to the unprecedented quantities of wealth that have been transferred and continue to be transferred from the middle and lower cla

These sums are paltry compared to the unprecedented quantities of wealth that have been transferred and continue to be transferred from the middle and lower classes to the elite of the finance and defense industries. Aside from the wealth itself, there is a tremendous opportunity cost, since capital is moved from productive to outright destructive and criminal sectors of the economy. The primary vehicle of these transfers is monetary expansion. All else being equal, a sound currency would bring orders of magnitude improvement in the real economy and dramatically increase standards of living for the bottom 90% of the population far beyond what can be achieved through programs like the ones you mention. Of course, there would be a deflationary collapse first, but this would be the best thing that could possibly happen for the vast majority of us.

nostrademons 16y ago
Some numbers, albeit a couple years old: http://www.washingtonpost.com/wp-srv/politics/interactives/budget07/category.html http://www.washingtonpost.com/wp-srv/politics/interactives/b... Social security and medicare combined are 35% of the Federal budget. Income security is another 10%. National defense is 19%. Interest payments (essentially a transfer of wealth from taxpayers to T-bill holders, i.e. poor Americans to rich foreigners) are another 9%. It's also not true, in strict monetary terms, that the vehicle of these transfers is monetary expansion. Total federal spending is about $3T. The total expansion in the monetary base since 2008, even with the massive explosion due to quantitative easing, is only $1.2T. Tax receipts still form the bulk of the budget. I hate government waste as much as anyone, but get your facts straight before arguing.
- danenania 16y ago
  I'll admit to not having great command of the statistics, but I don't see how the numbers you posted refute any of my points, and I don't appreciate your little quip of condescension at the end. First, spending on social security, medicare, income security, and domestic programs is of a qualitatively different nature than military spending, bailouts, and the interest payments you mention in that it is inserted directly into the real economy instead of being diverted and for the most part removed for good. Yes, some small portion of the military budget really is for 'National Defense' and so would come closer to domestic spending, and perhaps some portion of the bailout funds wind up in the economy instead of banks in Zurich or Dubai, but the bulk of it is simply absconded. So you must strongly weight the impacts of these different types of expenditures in relation to each other to gauge their true comparative impacts, which you haven't addressed. Second, the monetary base is only a small part of the picture since this only includes physical currency and highly liquid assets. $1.2T is an enormous expansion that constitutes a doubling of the base, but much more important are M3 and MZM since these include credit, which contributes exponentially more to inflation and wealth transfer due to fractional reserve banking, which is only possible on anything remotely close to this scale in a fiat system. This graph illustrates my point quite well, and it only shows up to M2, presumably since the Fed stopped reporting the even more damning statistics: http://en.wikipedia.org/wiki/File:Components_of_US_Money_supply.svg http://en.wikipedia.org/wiki/File:Components_of_US_Money_sup.... So again you have ignored or confused critical factors. The last point you left unaddressed is opportunity cost, which is really the core of my argument. In a sound economy with sufficient resources available, the capital stock (wealth) increases on an exponential scale, not linearly, because the more capital that exists, the more that can be invested in creating even more capital. Therefore, interfering with this process of accumulation through wealth transfers and the instability caused by monetary manipulations has deceptively gargantuan opportunity costs. All the resources that are funneled into bombs and guns are employed in actively destroying capital when they would otherwise be accelerating its accumulation. Likewise for resources funneled into estates, yachts, and private jets for finance industry billionaires that SHOULD have gone into producing capital goods for the real economy. If you truly consider the full consequences of these policies and the functional relationships involved, the implications are almost unbelievably staggering.

nostrademons 16y ago

Some numbers, albeit a couple years old: http://www.washingtonpost.com/wp-srv/politics/interactives/budget07/category.html http://www.washingtonpost.com/wp-srv/politics/interactives/b... Social security and medicare combined are 35% of the Federal budget. Income security is another 10%. National defense is 19%. Interest payments (essentially a transfer of wealth from taxpayers to T-bill holders, i.e. poor Americans to rich foreigners) are another 9%. It's also not true, in strict monetary terms, that the vehicle of these transfers is monetary expansion. Total federal spending is about $3T. The total expansion in the monetary base since 2008, even with the massive explosion due to quantitative easing, is only $1.2T. Tax receipts still form the bulk of the budget. I hate government waste as much as anyone, but get your facts straight before arguing.

danenania 16y ago
I'll admit to not having great command of the statistics, but I don't see how the numbers you posted refute any of my points, and I don't appreciate your little quip of condescension at the end. First, spending on social security, medicare, income security, and domestic programs is of a qualitatively different nature than military spending, bailouts, and the interest payments you mention in that it is inserted directly into the real economy instead of being diverted and for the most part removed for good. Yes, some small portion of the military budget really is for 'National Defense' and so would come closer to domestic spending, and perhaps some portion of the bailout funds wind up in the economy instead of banks in Zurich or Dubai, but the bulk of it is simply absconded. So you must strongly weight the impacts of these different types of expenditures in relation to each other to gauge their true comparative impacts, which you haven't addressed. Second, the monetary base is only a small part of the picture since this only includes physical currency and highly liquid assets. $1.2T is an enormous expansion that constitutes a doubling of the base, but much more important are M3 and MZM since these include credit, which contributes exponentially more to inflation and wealth transfer due to fractional reserve banking, which is only possible on anything remotely close to this scale in a fiat system. This graph illustrates my point quite well, and it only shows up to M2, presumably since the Fed stopped reporting the even more damning statistics: http://en.wikipedia.org/wiki/File:Components_of_US_Money_supply.svg http://en.wikipedia.org/wiki/File:Components_of_US_Money_sup.... So again you have ignored or confused critical factors. The last point you left unaddressed is opportunity cost, which is really the core of my argument. In a sound economy with sufficient resources available, the capital stock (wealth) increases on an exponential scale, not linearly, because the more capital that exists, the more that can be invested in creating even more capital. Therefore, interfering with this process of accumulation through wealth transfers and the instability caused by monetary manipulations has deceptively gargantuan opportunity costs. All the resources that are funneled into bombs and guns are employed in actively destroying capital when they would otherwise be accelerating its accumulation. Likewise for resources funneled into estates, yachts, and private jets for finance industry billionaires that SHOULD have gone into producing capital goods for the real economy. If you truly consider the full consequences of these policies and the functional relationships involved, the implications are almost unbelievably staggering.