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How we paid for the War on Terror

104 points by riverlong 5y ago

minikites 5y ago
>The tragedy is that the better projects were never on the agenda of power at all. The tragedy is that the one thing that those with power and influence could agree on was war-fighting. There's not much more I can add to this. Society is made up of choices and we chose to slaughter people around the world instead of choosing to provide healthcare, education, or any other constructive benefit.
- titzer 5y ago
  Generations of mal-investment.
- ndnxmsm 5y ago
  Who is we?
- adventured 5y ago
  > instead of choosing to provide healthcare, education, or any other constructive benefit The US spends more per capita on healthcare and education than any other nation, by far. The US didn't choose not to provide healthcare or education. If you wanted to solve the healthcare equation in the US, you wouldn't need to spend an additional dime. Just bring US healthcare costs into alignment with Britain's NHS and the bottom ~45% of the country would be covered by Medicaid's existing outlays. Spending trillions more on healthcare would be the dumbest thing we could do, next to invading Iraq. We need to smash costs downward and spread healthcare wide, not continue the cost inflation spiral; you rationally do that without spending more than we already are. The same goes for education, the last thing we need is to spend more on education, we need to actually start getting a good return on our outrageous education spending, and push cost out of the system simultaneously. > Society is made up of choices and we chose to slaughter people around the world It's certainly true the US should have never invaded Iraq and should not have stayed in Afghanistan so long. Slaughter people? Bull. The US overwhelmingly did the opposite of slaughtering people. It lost trillions of dollars and thousands of soldiers trying to keep people from slaughtering each other, trying to prop up central governments (which has largely succeeded in Iraq). It stepped inbetween civil wars in both Iraq and Afghanistan. Are you seeing what the Taliban are doing right now? That's one group of Afghanis trying to kill/enslave/conquer the rest. Regional warlords are already right back to fighting for territorial gains. That was going on before the US invaded. It'll be going on in another 50 years too. The US neither created the Taliban (despite what propaganda to the contrary claims) nor caused the civil war in Afghanistan; the US did step into the ongoing Afghanistan civil war, assisting the Northern Alliance at first and then fully invading second to prop up a new central government. Do you know why so many people are fleeing from the Taliban and seeking escape with the US at the airport? Specifically because it was the US that was not trying to slaughter people in Afghanistan. The Taliban are the slaughtering group the US was trying to get rid of. If the US were the slaughtering faction, people would be running in terror from the US instead of seeking safety with the US. If the US were the slaughtering faction, those thousands of Afghani refugees landing at Dulles in Virginia would be getting executed at the airport on arrival. The civil war in Iraq was directly caused by the US overthrowing Saddam Hussein, and that civil war was inevitable regardless of US involvement. That internal religious conflict has very long tentacles in history, going back many hundreds of years. Most of those deaths listed on that page are directly from internal warring factions within the nations, killing each other in civil war. Not from the US "slaughtering" people. Those conflicts existed before the US and they will exist after the US. Which, again, is also not an argument for the US invading Iraq and doesn't excuse the stupidity of the US invading. There was no scenario where Saddam was going to be displaced and Iraq wasn't going to fall into a civil war, especially given the minority oppressor vs majority oppressed conflict that Saddam's power represented. Iraq wasn't stable before the US invaded, it was a disaster of instability, genocide and terror, which is why Saddam had to constantly purge and murder people to retain power. When you have stability, you don't have to do that. The US released a hyper oppressed majority population in Iraq, it's no wonder there were violent consequences to that; those consequences were always unavoidable, no matter how Saddam was removed. What's the counter premise? Saddam should have stayed in power forever, or that Saddam was going to be peacefully removed from power and it was going to be a lovefest? It's an ignorant fantasy. The US had a moral right to step in and help the Iraqi people, who were under occupation by Saddam's dictatorship (especially true of the majority Shia), every bit as much as it had a moral right to step in and help the French people cast off the Nazis. The US had a moral right to help the people of Afghanistan depose the Taliban, every bit as much as the US had a moral right to help nations in Eastern Europe cast off the shackles of the USSR. The Soviets were no better than the Taliban ideologically. The people of Europe are no more worthy of help than the people of Iraq or Afghanistan. Which also doesn't mean it was in the US self-interest to get involved in either Iraq or Afghanistan.
- 3009629147 5y ago
  Who is "we"? Afaik the U.S. military power structure is based on soldiers obeying orders they receive from their superior.
- hash872 5y ago
  The United States spends more on healthcare just for the elderly as it does its entire, famous military budget. The spends 70% more on Medicare & Medicaid combined, than the entire military budget. It spends more than three times as much on Social Security, Medicare and Medicaid than on the entire military budget. If you add in PPP, unemployment, and the stimulus checks, you're looking at 4-5x more social spending than entire military budget. Here, look at the numbers from the Congressional Budget Office yourself: https://www.cbo.gov/publication/57170 https://www.cbo.gov/publication/57170
ndnxmsm 5y ago
Any proper left wing position is against war between nations but in support of war between classes.
borski 5y ago
This is a genuinely fascinating and eye-opening way to look at it. I had never considered it from the perspective of the Keynesian economic machine.
gHosts 5y ago
> There is no pot of money in between that defines limits or possibilities. We should by all means spend time thinking about what it would be good to spend $ 5 trillion on, but given the available resources and the amount of slack at our disposal that is a case to be made independent of the spending on the war. Bollocks. The amount of productivity of each worker and the primary productivity of the land is finite. That is The Pot. Anything that drains that pot results in a poorer country.
- nightski 5y ago
  Historically defense spending has been decreasing as a % of GDP. It's as low as ~3.5% now, near the lowest it has ever been.
  - IncRnd 5y ago
    That's a percentage of GDP, but the actual military budget per year hasn't been decreasing like that. It's increased every year since 2003. See this table: Military Spending History [1] [1] https://www.thebalance.com/u-s-military-budget-components-challenges-growth-3306320 https://www.thebalance.com/u-s-military-budget-components-ch...
    - nightski 5y ago
      I mean that chart shows it basically increasing on par with inflation, especially in the 2011-2021 decade. Why would you expect it to stay the same or decrease as our economic value grows?
      - IncRnd 5y ago
        That is not what it shows. The overall cumulative price change from 2003 to 2021 is just shy of 50%, yet the Military Spending went from $437B to $934B. Taking a smaller portion to support a desired statitical result is not scientific.
        5y ago
Animats 5y ago
Yes. When we started the "War on Terror", there should have been a "War Tax". As there was in WWI and WWII. "During the Second World War, the top individual tax rate rose to 94 percent and remained at 91 percent for nearly two decades—until 1964."
- JadeNB 5y ago
  Instead we find ourselves somehow considering the idea that a 37% top individual tax rate is usurious.
  - IncRnd 5y ago
    People tithe 10% to God. Taxing 37% of income is usurious taxation. You would be sorely mistaken if you believed that people paid 94% of their income as taxation. The tax code is entirely different today from then.
    - triceratops 5y ago
      > You would be sorely mistaken if you believed that people paid 94% of their income as taxation Yes, because that's a marginal rate, not a effective rate. There's a big difference between the two, that many people are quick to gloss over.
      - IncRnd 5y ago
        > Yes, because that's a marginal rate, not a effective rate. There's a big difference between the two, that many people are quick to gloss over. Oftentimes, that happens when it is desired for some people to pay more than they currently are. The entire tax code has changed, though.
        triceratops 5y ago
        I'd love to see examples of people who advocate raising tax rates glossing over marginal and effective rates. It would actually be to their advantage if more people understood the difference. The number of people who turn down raises because "My taxes will go up" is depressingly high (Any number > 0 is too damn high. You'd have to be deeply misinformed to turn down a raise because of taxes). Those are the same people likely to vote down higher tax rates on higher incomes. On the other hand if you support lower tax rates, it's to your advantage for voters to be misinformed about this. The more people who think their taxes are going up, even though they aren't, the more people are likely to vote against raising the top tax brackets.
0xbadcafebee 5y ago
If you want to wage expensive wars and need to pay for it, you have two basic options: squeeze your people, or squeeze somebody else's people. It doesn't matter what your political slant is or even your economic philosophy. You don't even have to be constrained by your own economy. And even if you were, "your economy" might be so wound-up in the economies of other nations that those other nations end up supplementing your economy enough to pay for the war. Or you can just pillage. In any case, the money always comes from the people; you just have to figure out which people that ended up being. There is of course the third option: "don't pay for it". In that case, your government (or rulers) are generally doomed, because there is always somebody with money who will see your faltering state as a juicy investment or acquisition. We seem to be in a "peaceful period", as countries like Venezuela still haven't been snapped up; but rest assured that somebody (cough China cough) will be by eventually to pick it up and give it a new coat of paint.
seibelj 5y ago
A major problem with hyper-Keynesian MMT advocates is that it relies on: - Having the global reserve currency - Being able to raise taxes at will to fight inflation It may be possible that with a one-world government and global agreement on central currency that we could get to this. But instead the US only has the global reserve currency, and the political will to print it seemingly infinitely, but not the ability to raise taxes dynamically. We are already seeing high inflation (by recent US standards) that is beginning to become politically untenable. A full-throated MMT policy would be impossible in the current environment. Even worse there are major threats to USD as the global reserve currency, from Bitcoin to China RMB. I fear the politicians are playing with fire and the lack of fiscal discipline will lead to serious backlash and the reduction in global financial power for the US.
- websites2023 5y ago
  There is no serious threat the US Dollar as the global reserve currency. China is a currency manipulator and is teetering on the edge of collapse because of their monetary management. Bitcoin is far too unstable and represents a relinquishment of government control over monetary policy, which no sane government will give up. To put it bluntly, governments would rather the US control the world’s money supply than to give up control to the blockchain, which is poorly understood and far too risky to use outside of speculative markets and small scale experiments.
omegaworks 5y ago
>Why do progressive critiques of the war fall back on conservative versions of economics to underpin an anti-war position? Spending money keeping people alive is a more productive use of that money than spending money to make people dead. MMT doesn't change this equation. In fact, it points out explicitly that increased money supply MUST be used to increase productivity. The exact opposite of what happens when you spend money to bomb people.
keewee7 5y ago
Why is American warfare so expensive? Russian, French and Turkish interventionism in the Middle East and Africa are an order of magnitude smaller but they seem to have accomplished more than the US/NATO did in Afghanistan. The Iraq war is a complicated beast. The Iraqis I know feel the country improved for the better but US foreign policy on Israel-Palestine and warmongering against Iran (most Iraqis are Shia) has eroded whatever goodwill they had after the fall of Saddam.
- marvinalone 5y ago
  This guy had a great breakdown for why the US military is so expensive: https://www.reddit.com/r/changemyview/comments/71bq8h/cmv_the_military_budget_of_the_us_is/dn9mqdq?utm_source=share&utm_medium=web2x&context=3 https://www.reddit.com/r/changemyview/comments/71bq8h/cmv_th...
  - nebula8804 5y ago
    From the end of his part 2: >The US is the only Western nation with the demographics (population size and age), political will, technological capacity, and economic ability to challenge a surging China or resurgent Russia (which inherited the might of the Soviet Union to build off of) on the world stage. >How many Americans would change their tone on military spending if China or Russia were calling the shots on world issues? On spreading their views on governance or human rights? Or if the balance of power shifted so much that more nations decided it was time for them to get nuclear weapons too (imagine Saudi Arabia getting nukes...)? This was written in 2017. Man I would love to hear his assessment as to how the US is doing vs China today. So much has transpired since then.
- lostlogin 5y ago
  > Why is American warfare so expensive? Russian, French and Turkish interventionism in the Middle East and Africa are an order of magnitude smaller but they seem to have accomplished more than the US/NATO did in Afghanistan. I’m no apologist for the US, quite the opposite. However if you want a good comparison, compare the how various empires fared in Afghanistan, it’s as close to like-for-like as we will ever get. The US, Britain and Russia all did miserably. Wasted time, lives and money and they have caused huge harm while losing.
jessaustin 5y ago
This is true but understated. A third of humanity is subject to some sort of economic sanctions or embargo, which invariably are instituted as some sort of pretext for future war. This costs the global economy some huge amount, but for the specific nations targeted most brutally (Venezuela, Iran, etc.) it leads to many more deaths because medicines and other healthcare supplies cannot be imported.
- FridayoLeary 5y ago
  Iran is led by bloodthirsty dictators. If not for the sanctions they would have likely started wars with half the Middle East. Now they are merely antagonizing half the Middle East.
  - jessaustin 5y ago
    Since apparently it's easy to know what would happen in different hypothetical worlds, I think it would have been better if USA had not overthrown Iran's democratically-elected anti-communist-and-gradually-less-monarchist government in 1953. Even bloodthirsty warhawk Madeleine Albright admitted it: "the coup was clearly a setback for Iran's political development." [0] It was also bad when USA paid Saddam Hussein to instigate a bloody war with Iran, so skipping that would have been a good idea. But we don't have to imagine a different world. Even with Iran's shortfalls in democracy, their leadership is better on most measures than USA's allies in the region Saudi Arabia, UAE, Israel, etc. [0] https://1997-2001.state.gov/statements/2000/000317.html https://1997-2001.state.gov/statements/2000/000317.html
    - deleted 5y ago
      [deleted]
dalbasal 5y ago
OK so this is kind of wordy... Let me try to point out the guts... no one would deny that in an economy operating at 100 percent full capacity - as in the kind of European war economy that Keynes analyzed in the 1940s - crowding out may occur. But that is a highly unusual state of affairs and is precisely not what a progressive analysis of capitalism should take for granted. There is no reason to believe that the US economy at any point in the last 20 years has operated close to that absolute limit, at which trade offs are zero sum. Keyne's "how to pay for the war" booklet is all about how to suppress consumption through saving, rationing and such. Actual consumption needed to be suppressed, because factories needed to make tanks instead of cars. The book is not about how to print money, deal with finance markets, etc. We'd call that "fiscal policy." Fighting WW2 genuinely pushed the UK's financial limits. The problem wasn't ability to borrow, inflation, money markets & such. The problem was the ability of its economy to support such a big military effort. The point of this blog, I think, is that there was never a "how to pay for the war" pamphlet for afghanistan. US & NATO industries and economies were capable of supporting the war, accounted for as a deficit, without austerity like Keyne's prescribed for the UK. Hence capacity.
- bsedlm 5y ago
  There's also a key difference between WW2 and the war on terror, which is fiat money created in the 70s (around Nixon's time). Right around the start of the war on drugs.
  - AnimalMuppet 5y ago
    That matters less than you seem to think. Printing money doesn't magically create more stuff, nor does it change the economy's ability to create more stuff. It just changes who has the ability to buy what the real economy creates. And... > Right around the start of the war on drugs. What, specifically, are you vaguely hinting at?
    - bsedlm 5y ago
      > Printing money doesn't magically create more stuff, nor does it change the economy's ability to create more stuff. You're right, there's not much to this until the monetary system is based on fiat-currency, at this point there's a soft obligation (maybe? I don't understand fiat well enough) to back the created money by building things in the real economy. But what the USA has created with the fiat-based money is war, which adds bomb-making and building reconstruction into the real economy. The war on drugs seems to create corruption. The only real connection is the time period in which USA's congress passed laws for money laundering, war on drugs, and fiat money (a little bit before, iirc)
failrate 5y ago
Yes, the fed issues currency by fiat, but the actual resources consumed by this war probably account for the monetary price tag. Additionally, the money spent did not vanish in a puff of smoke at the end of a gun: it lined the war chests of the military industrial complex. This gives these people and organizations outsized influence to manipulate our government into staying in wars in order to justify buying expensive munitions. This destructive feedback loop is the true cost of war.
- arodgers_la 5y ago
  Which people and which organizations, exactly?
  - tcoff91 5y ago
    I'm assuming he's referring to companies like Lockheed Martin, Raytheon, etc...
  - conradev 5y ago
    The usual suspects – Lockheed Martin, Boeing, Raytheon, Northrop Grumman, etc. https://en.wikipedia.org/wiki/Top_100_Contractors_of_the_U.S._federal_government https://en.wikipedia.org/wiki/Top_100_Contractors_of_the_U.S...
- 3009629147 5y ago
  Please note: most (±95%) of the U.S. money supply is not created by the Federal Reserve, but by the U.S. commercial banks as deposits when they make loans. [1] Alternatively you can read the Bank of England report on Money creation. [2] It's about the British economy but goes into further detail and the monetary principles are the same in every modern country. [1] https://www.kreditordnung.info/docs/S_and_P__Repeat_After_Me_8_14_13.pdf https://www.kreditordnung.info/docs/S_and_P__Repeat_After_Me... [2] https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m...
- mercy_dude 5y ago
  > This gives these people and organizations outsized influence to manipulate our government into staying in wars in order to justify buying expensive munitions. This destructive feedback loop is the true cost of war. Oh and you forgot the revolving door that exists between the military industrial complex and DC power Center. And how they influence the policy decisions. Our current defence secy for example is a former Rayethonian exec.
bsedlm 5y ago
> There is a productive apparatus and resources that feed it - what we are gesturing towards when we talk about “the economy”. They can be mobilized using flows of spending generated by public or private credit, to move in one direction or another. > It wasn’t pouring money into the sand. Most of the dollars flowed back to America. Fiat based money (in which currency -- circulating money, is actually debt) works fine when this money is used to build (and maintain?) infrasctucture, markets, industries, which can then "pay back" this debt; which can sustain a society. The truly sad part, most would agree, is that they'd use this for destructive purposes. First use fiat-credit to fund a war to break a foreign country and then loan out more credit to pay for rebuilding it. The end result is a transfer of (at least) ownership back to America.
avalys 5y ago
The simple explanation here is that 200 billion per year over 20 years is unquestionably a lot of money, but not large enough relative to overall US government spending ($7T per year) to perturb anything all that much.
hogFeast 5y ago
Reducing his analysis to MMT, as some here are doing, suggests that you don't know about Tooze's area of study. His magnum opus, probably one of the greatest books in modern economic history, looked at precisely these questions of govt spending being taken to the limit (in Nazi Germany). But, a bit like those who specialise in Japanese economic history, I feel like it is pretty misleading to base your argument for MMT on purely wartime measures: not only is the level of govt spending changing but the allocation of resources is changing...that is very different to a non-wartime economy where there aren't huge supply changes. After WW2, there was huge economic dislocation and inflation. But it seems very churlish to look at WW2 and say: there are no limits to spending. When: most economies in the world effectively shut down, trade shut down, there was massive destruction of supply, massive financial repression...financial repression in the US, by far the economy that was least negatively impacted, didn't end in truth until the mid-60s. The UK economy didn't recover in full until the 90s. Crowding out does occur. It isn't unusual. There is ample evidence of it occurring. It is dangerous to point out too that "there is no limit" and then fail to mention that your only sources for this claim are dictatorships or countries at war...there is a reason for this (it is often politically unpalatable to take control over production such that crowding out is prevented). The reason why there was no crowding out, to be blunt, is that these wars weren't very expensive. They provide no evidence to support the claim that: that we are nowhere close to the real limit on spending. Almost every industry right now has shortages, and the economy isn't close to full capacity because the labour participation rate is low? Rakakakakaka. I like Tooze but this is very weak stuff (it is worth pointing out though, that the last part of the previous paragraph is essentially the Fed's position...so we will likely find out who is right). It is also interesting that he didn't mention the 1920s more either...this is the ultimate "proof" that austerity makes no sense. But it is also worth pointing out that after WW1, lots of countries had the same issues after WW2. There were huge price changes in 1920 that basically felled the UK economy until the 90s (WW2 and US actions after were just the final nail in the coffin), it is quite foolish to suppose that the UK economy would have just magically recovered if the govt started spending...it was a supply-side issue, not a problem with demand (the US was the counter-point to this, the US started the decade with a relatively blank slate and this decade turned the US into a financial power competing with the UK...the UK was legacy, stuck with all the old industries that were shrinking, and struggled to retool after the war ended)...but yeah, usually every economic narrative that takes the Keynesian approach will mention 1920s UK...it is a classic (although misleading) example.
hamburgerwah 5y ago
I'm always amazed at the people that think that somehow if the government had not misspent these trillions of dollars on war that it could have somehow effectively spent it on massive health and education projects. The choice here was for a corrupt congress to dole out trillions in directionless war or dole out trillions in directionless health and education boondoggles. Also these same people seem to be against tax cuts. I think the federal government needs to cut about 700,000 federal jobs and we need to shrink the discretionary federal budget by at least 500 billion. If we don't, you will keep getting iraqs and afghanistans until we collapse.
FridayoLeary 5y ago
Its forgotten how many benefits warfare can bring to humanity. WW2 transformed the US into a global superpower and an industrial powerhouse of unprecedented scale. Technologies invented to aid warfare are improving the quality of life (e.g. aircraft, radar, computers, internet etc etc.) I think that the war industry actually brings us tremendous benefits with a good ROI.
macroninomics 5y ago
Michael Hudson's "Super Imperialism: The Economic Strategy Of Imperial America" explains: "When the US payment deficit pumps dollars into foreign economies, these banks (have) little option except to buy US Treasury bills and bonds which the Treasury spends on financing an enormous, hostile military build-up to encircle (today's) major dollar-recyclers China, Japan and Arab OPEC oil producers" - essentially a process by which they finance their own endangerment. From https://www.countercurrents.org/lendman010709.htm https://www.countercurrents.org/lendman010709.htm Additional links: https://mronline.org/2021/02/09/michael-hudson-changes-in-super-imperialism/ https://mronline.org/2021/02/09/michael-hudson-changes-in-su... https://www.youtube.com/watch?v=PtHX23Trvy4 https://www.youtube.com/watch?v=PtHX23Trvy4
- 3009629147 5y ago
  I respect Michael Hudson but he is slightly wrong here. They can also buy U.S. stocks like the Swiss Central Bank does. [1] [1] https://sec.report/Document/0001582202-21-000003/?__cf_chl_jschl_tk__=pmd_ii6lmHcIZE0op5_M1UZNmOSSWExwbxXQ5lAVgyoHT.k-1629758865-0-gqNtZGzNAjujcnBszQal https://sec.report/Document/0001582202-21-000003/?__cf_chl_j...
  - macroninomics 5y ago
    Yet the Switzerland is still one of the largest foreign of treasury securities: https://ticdata.treasury.gov/Publish/mfh.txt https://ticdata.treasury.gov/Publish/mfh.txt
tra3 5y ago
I'm confused. > If we want to criticize the War on Terror from a perspective that does not betray sensible macroeconomics, we should not rely on calculations of cost, or suggestions of crowding out to do the work for us. America could easily afford the War on Terror. How is "crowding out" still not a reasonable argument? Sure, he says you can print more money, but then you run against the constraints (like inflation) that he talks about earlier in the article. So there's a limit to how much can be printed, and does that not "crowd out" other potential spending targets?
elango 5y ago
Military, Finance and Health spending by govts in turn fill the pockets of Enterprises, hand in glove with central govts, I am unable to even think of a remote possibility on how to break this nexus.
jhallenworld 5y ago
The war is a failure of imagination. You are paying millions of people to work on the War on Terror. It's nice that they're all employed, that the rich get richer etc., but can we not think of anything better to do with our time?
anm89 5y ago
Hard to take anyone seriously who repeats the cartoonish idea that claiming budgets matter for governments is a fallacious attempt to conflate a government with a household. It is ironically an absolutely fundamental failure to understand the basics of public finance. If only someone had informed Zimbabwe that they could have kept on printing because government debts don't matter when you print your own currency. Anyway, believe whatever you want to believe. Americans who run their personal finances like dollar hegemony will keep them wealthy forever will pay the price in the end.
Nevermark 5y ago
The article says spending borrowed money on war doesn’t crowd out other economic goods. But of course it does. How money is raised and how it is spent are separate issues. You can say borrowing is ok, or not, for any given level. But what you can’t do is spend the same money on massive military activity, with little hold over value, and that same money on investments that increase productivity for a generation, like targeted education, research and infrastructure. Whatever you spend a dollar on, you have “crowded out” the alternative. And saying well you can borrow more isn’t a valid point. You just have more money, but you are still choosing one thing or another with every dollar. (In characterizing military activity as not an investment I am not addressing the case of wars that preserved our and our allies freedom, but the disastrous discretionary ones of the new century.) HOW you spend money is always a trade off, no matter where the money came from.

104 points by riverlong 5y ago

>The tragedy is that the better projects were never on the agenda of power at all. The tragedy is that the one thing that those with power and influence could agree on was war-fighting. There's not much more I can add to this. Society is made up of choices and we chose to slaughter people around the world instead of choosing to provide healthcare, education, or any other constructive benefit.

titzer 5y ago
Generations of mal-investment.
ndnxmsm 5y ago
Who is we?
adventured 5y ago
> instead of choosing to provide healthcare, education, or any other constructive benefit The US spends more per capita on healthcare and education than any other nation, by far. The US didn't choose not to provide healthcare or education. If you wanted to solve the healthcare equation in the US, you wouldn't need to spend an additional dime. Just bring US healthcare costs into alignment with Britain's NHS and the bottom ~45% of the country would be covered by Medicaid's existing outlays. Spending trillions more on healthcare would be the dumbest thing we could do, next to invading Iraq. We need to smash costs downward and spread healthcare wide, not continue the cost inflation spiral; you rationally do that without spending more than we already are. The same goes for education, the last thing we need is to spend more on education, we need to actually start getting a good return on our outrageous education spending, and push cost out of the system simultaneously. > Society is made up of choices and we chose to slaughter people around the world It's certainly true the US should have never invaded Iraq and should not have stayed in Afghanistan so long. Slaughter people? Bull. The US overwhelmingly did the opposite of slaughtering people. It lost trillions of dollars and thousands of soldiers trying to keep people from slaughtering each other, trying to prop up central governments (which has largely succeeded in Iraq). It stepped inbetween civil wars in both Iraq and Afghanistan. Are you seeing what the Taliban are doing right now? That's one group of Afghanis trying to kill/enslave/conquer the rest. Regional warlords are already right back to fighting for territorial gains. That was going on before the US invaded. It'll be going on in another 50 years too. The US neither created the Taliban (despite what propaganda to the contrary claims) nor caused the civil war in Afghanistan; the US did step into the ongoing Afghanistan civil war, assisting the Northern Alliance at first and then fully invading second to prop up a new central government. Do you know why so many people are fleeing from the Taliban and seeking escape with the US at the airport? Specifically because it was the US that was not trying to slaughter people in Afghanistan. The Taliban are the slaughtering group the US was trying to get rid of. If the US were the slaughtering faction, people would be running in terror from the US instead of seeking safety with the US. If the US were the slaughtering faction, those thousands of Afghani refugees landing at Dulles in Virginia would be getting executed at the airport on arrival. The civil war in Iraq was directly caused by the US overthrowing Saddam Hussein, and that civil war was inevitable regardless of US involvement. That internal religious conflict has very long tentacles in history, going back many hundreds of years. Most of those deaths listed on that page are directly from internal warring factions within the nations, killing each other in civil war. Not from the US "slaughtering" people. Those conflicts existed before the US and they will exist after the US. Which, again, is also not an argument for the US invading Iraq and doesn't excuse the stupidity of the US invading. There was no scenario where Saddam was going to be displaced and Iraq wasn't going to fall into a civil war, especially given the minority oppressor vs majority oppressed conflict that Saddam's power represented. Iraq wasn't stable before the US invaded, it was a disaster of instability, genocide and terror, which is why Saddam had to constantly purge and murder people to retain power. When you have stability, you don't have to do that. The US released a hyper oppressed majority population in Iraq, it's no wonder there were violent consequences to that; those consequences were always unavoidable, no matter how Saddam was removed. What's the counter premise? Saddam should have stayed in power forever, or that Saddam was going to be peacefully removed from power and it was going to be a lovefest? It's an ignorant fantasy. The US had a moral right to step in and help the Iraqi people, who were under occupation by Saddam's dictatorship (especially true of the majority Shia), every bit as much as it had a moral right to step in and help the French people cast off the Nazis. The US had a moral right to help the people of Afghanistan depose the Taliban, every bit as much as the US had a moral right to help nations in Eastern Europe cast off the shackles of the USSR. The Soviets were no better than the Taliban ideologically. The people of Europe are no more worthy of help than the people of Iraq or Afghanistan. Which also doesn't mean it was in the US self-interest to get involved in either Iraq or Afghanistan.
3009629147 5y ago
Who is "we"? Afaik the U.S. military power structure is based on soldiers obeying orders they receive from their superior.
hash872 5y ago
The United States spends more on healthcare just for the elderly as it does its entire, famous military budget. The spends 70% more on Medicare & Medicaid combined, than the entire military budget. It spends more than three times as much on Social Security, Medicare and Medicaid than on the entire military budget. If you add in PPP, unemployment, and the stimulus checks, you're looking at 4-5x more social spending than entire military budget. Here, look at the numbers from the Congressional Budget Office yourself: https://www.cbo.gov/publication/57170 https://www.cbo.gov/publication/57170

ndnxmsm 5y ago

Any proper left wing position is against war between nations but in support of war between classes.

borski 5y ago

This is a genuinely fascinating and eye-opening way to look at it. I had never considered it from the perspective of the Keynesian economic machine.

gHosts 5y ago

> There is no pot of money in between that defines limits or possibilities. We should by all means spend time thinking about what it would be good to spend $ 5 trillion on, but given the available resources and the amount of slack at our disposal that is a case to be made independent of the spending on the war. Bollocks. The amount of productivity of each worker and the primary productivity of the land is finite. That is The Pot. Anything that drains that pot results in a poorer country.

nightski 5y ago
Historically defense spending has been decreasing as a % of GDP. It's as low as ~3.5% now, near the lowest it has ever been.
- IncRnd 5y ago
  That's a percentage of GDP, but the actual military budget per year hasn't been decreasing like that. It's increased every year since 2003. See this table: Military Spending History [1] [1] https://www.thebalance.com/u-s-military-budget-components-challenges-growth-3306320 https://www.thebalance.com/u-s-military-budget-components-ch...
  - nightski 5y ago
    I mean that chart shows it basically increasing on par with inflation, especially in the 2011-2021 decade. Why would you expect it to stay the same or decrease as our economic value grows?
    - IncRnd 5y ago
      That is not what it shows. The overall cumulative price change from 2003 to 2021 is just shy of 50%, yet the Military Spending went from $437B to $934B. Taking a smaller portion to support a desired statitical result is not scientific.
      - 5y ago

Animats 5y ago

Yes. When we started the "War on Terror", there should have been a "War Tax". As there was in WWI and WWII. "During the Second World War, the top individual tax rate rose to 94 percent and remained at 91 percent for nearly two decades—until 1964."

JadeNB 5y ago
Instead we find ourselves somehow considering the idea that a 37% top individual tax rate is usurious.
- IncRnd 5y ago
  People tithe 10% to God. Taxing 37% of income is usurious taxation. You would be sorely mistaken if you believed that people paid 94% of their income as taxation. The tax code is entirely different today from then.
  - triceratops 5y ago
    > You would be sorely mistaken if you believed that people paid 94% of their income as taxation Yes, because that's a marginal rate, not a effective rate. There's a big difference between the two, that many people are quick to gloss over.
    - IncRnd 5y ago
      > Yes, because that's a marginal rate, not a effective rate. There's a big difference between the two, that many people are quick to gloss over. Oftentimes, that happens when it is desired for some people to pay more than they currently are. The entire tax code has changed, though.
      - triceratops 5y ago
        I'd love to see examples of people who advocate raising tax rates glossing over marginal and effective rates. It would actually be to their advantage if more people understood the difference. The number of people who turn down raises because "My taxes will go up" is depressingly high (Any number > 0 is too damn high. You'd have to be deeply misinformed to turn down a raise because of taxes). Those are the same people likely to vote down higher tax rates on higher incomes. On the other hand if you support lower tax rates, it's to your advantage for voters to be misinformed about this. The more people who think their taxes are going up, even though they aren't, the more people are likely to vote against raising the top tax brackets.

0xbadcafebee 5y ago

If you want to wage expensive wars and need to pay for it, you have two basic options: squeeze your people, or squeeze somebody else's people. It doesn't matter what your political slant is or even your economic philosophy. You don't even have to be constrained by your own economy. And even if you were, "your economy" might be so wound-up in the economies of other nations that those other nations end up supplementing your economy enough to pay for the war. Or you can just pillage. In any case, the money always comes from the people; you just have to figure out which people that ended up being. There is of course the third option: "don't pay for it". In that case, your government (or rulers) are generally doomed, because there is always somebody with money who will see your faltering state as a juicy investment or acquisition. We seem to be in a "peaceful period", as countries like Venezuela still haven't been snapped up; but rest assured that somebody (cough China cough) will be by eventually to pick it up and give it a new coat of paint.

seibelj 5y ago

A major problem with hyper-Keynesian MMT advocates is that it relies on: - Having the global reserve currency - Being able to raise taxes at will to fight inflation It may be possible that with a one-world government and global agreement on central currency that we could get to this. But instead the US only has the global reserve currency, and the political will to print it seemingly infinitely, but not the ability to raise taxes dynamically. We are already seeing high inflation (by recent US standards) that is beginning to become politically untenable. A full-throated MMT policy would be impossible in the current environment. Even worse there are major threats to USD as the global reserve currency, from Bitcoin to China RMB. I fear the politicians are playing with fire and the lack of fiscal discipline will lead to serious backlash and the reduction in global financial power for the US.

websites2023 5y ago
There is no serious threat the US Dollar as the global reserve currency. China is a currency manipulator and is teetering on the edge of collapse because of their monetary management. Bitcoin is far too unstable and represents a relinquishment of government control over monetary policy, which no sane government will give up. To put it bluntly, governments would rather the US control the world’s money supply than to give up control to the blockchain, which is poorly understood and far too risky to use outside of speculative markets and small scale experiments.

omegaworks 5y ago

>Why do progressive critiques of the war fall back on conservative versions of economics to underpin an anti-war position? Spending money keeping people alive is a more productive use of that money than spending money to make people dead. MMT doesn't change this equation. In fact, it points out explicitly that increased money supply MUST be used to increase productivity. The exact opposite of what happens when you spend money to bomb people.

keewee7 5y ago

Why is American warfare so expensive? Russian, French and Turkish interventionism in the Middle East and Africa are an order of magnitude smaller but they seem to have accomplished more than the US/NATO did in Afghanistan. The Iraq war is a complicated beast. The Iraqis I know feel the country improved for the better but US foreign policy on Israel-Palestine and warmongering against Iran (most Iraqis are Shia) has eroded whatever goodwill they had after the fall of Saddam.

marvinalone 5y ago
This guy had a great breakdown for why the US military is so expensive: https://www.reddit.com/r/changemyview/comments/71bq8h/cmv_the_military_budget_of_the_us_is/dn9mqdq?utm_source=share&utm_medium=web2x&context=3 https://www.reddit.com/r/changemyview/comments/71bq8h/cmv_th...
- nebula8804 5y ago
  From the end of his part 2: >The US is the only Western nation with the demographics (population size and age), political will, technological capacity, and economic ability to challenge a surging China or resurgent Russia (which inherited the might of the Soviet Union to build off of) on the world stage. >How many Americans would change their tone on military spending if China or Russia were calling the shots on world issues? On spreading their views on governance or human rights? Or if the balance of power shifted so much that more nations decided it was time for them to get nuclear weapons too (imagine Saudi Arabia getting nukes...)? This was written in 2017. Man I would love to hear his assessment as to how the US is doing vs China today. So much has transpired since then.
lostlogin 5y ago
> Why is American warfare so expensive? Russian, French and Turkish interventionism in the Middle East and Africa are an order of magnitude smaller but they seem to have accomplished more than the US/NATO did in Afghanistan. I’m no apologist for the US, quite the opposite. However if you want a good comparison, compare the how various empires fared in Afghanistan, it’s as close to like-for-like as we will ever get. The US, Britain and Russia all did miserably. Wasted time, lives and money and they have caused huge harm while losing.

jessaustin 5y ago

This is true but understated. A third of humanity is subject to some sort of economic sanctions or embargo, which invariably are instituted as some sort of pretext for future war. This costs the global economy some huge amount, but for the specific nations targeted most brutally (Venezuela, Iran, etc.) it leads to many more deaths because medicines and other healthcare supplies cannot be imported.

FridayoLeary 5y ago
Iran is led by bloodthirsty dictators. If not for the sanctions they would have likely started wars with half the Middle East. Now they are merely antagonizing half the Middle East.
- jessaustin 5y ago
  Since apparently it's easy to know what would happen in different hypothetical worlds, I think it would have been better if USA had not overthrown Iran's democratically-elected anti-communist-and-gradually-less-monarchist government in 1953. Even bloodthirsty warhawk Madeleine Albright admitted it: "the coup was clearly a setback for Iran's political development." [0] It was also bad when USA paid Saddam Hussein to instigate a bloody war with Iran, so skipping that would have been a good idea. But we don't have to imagine a different world. Even with Iran's shortfalls in democracy, their leadership is better on most measures than USA's allies in the region Saudi Arabia, UAE, Israel, etc. [0] https://1997-2001.state.gov/statements/2000/000317.html https://1997-2001.state.gov/statements/2000/000317.html
  - deleted 5y ago
    [deleted]

dalbasal 5y ago

OK so this is kind of wordy... Let me try to point out the guts... no one would deny that in an economy operating at 100 percent full capacity - as in the kind of European war economy that Keynes analyzed in the 1940s - crowding out may occur. But that is a highly unusual state of affairs and is precisely not what a progressive analysis of capitalism should take for granted. There is no reason to believe that the US economy at any point in the last 20 years has operated close to that absolute limit, at which trade offs are zero sum. Keyne's "how to pay for the war" booklet is all about how to suppress consumption through saving, rationing and such. Actual consumption needed to be suppressed, because factories needed to make tanks instead of cars. The book is not about how to print money, deal with finance markets, etc. We'd call that "fiscal policy." Fighting WW2 genuinely pushed the UK's financial limits. The problem wasn't ability to borrow, inflation, money markets & such. The problem was the ability of its economy to support such a big military effort. The point of this blog, I think, is that there was never a "how to pay for the war" pamphlet for afghanistan. US & NATO industries and economies were capable of supporting the war, accounted for as a deficit, without austerity like Keyne's prescribed for the UK. Hence capacity.

bsedlm 5y ago
There's also a key difference between WW2 and the war on terror, which is fiat money created in the 70s (around Nixon's time). Right around the start of the war on drugs.
- AnimalMuppet 5y ago
  That matters less than you seem to think. Printing money doesn't magically create more stuff, nor does it change the economy's ability to create more stuff. It just changes who has the ability to buy what the real economy creates. And... > Right around the start of the war on drugs. What, specifically, are you vaguely hinting at?
  - bsedlm 5y ago
    > Printing money doesn't magically create more stuff, nor does it change the economy's ability to create more stuff. You're right, there's not much to this until the monetary system is based on fiat-currency, at this point there's a soft obligation (maybe? I don't understand fiat well enough) to back the created money by building things in the real economy. But what the USA has created with the fiat-based money is war, which adds bomb-making and building reconstruction into the real economy. The war on drugs seems to create corruption. The only real connection is the time period in which USA's congress passed laws for money laundering, war on drugs, and fiat money (a little bit before, iirc)

failrate 5y ago

Yes, the fed issues currency by fiat, but the actual resources consumed by this war probably account for the monetary price tag. Additionally, the money spent did not vanish in a puff of smoke at the end of a gun: it lined the war chests of the military industrial complex. This gives these people and organizations outsized influence to manipulate our government into staying in wars in order to justify buying expensive munitions. This destructive feedback loop is the true cost of war.

arodgers_la 5y ago
Which people and which organizations, exactly?
- tcoff91 5y ago
  I'm assuming he's referring to companies like Lockheed Martin, Raytheon, etc...
- conradev 5y ago
  The usual suspects – Lockheed Martin, Boeing, Raytheon, Northrop Grumman, etc. https://en.wikipedia.org/wiki/Top_100_Contractors_of_the_U.S._federal_government https://en.wikipedia.org/wiki/Top_100_Contractors_of_the_U.S...
3009629147 5y ago
Please note: most (±95%) of the U.S. money supply is not created by the Federal Reserve, but by the U.S. commercial banks as deposits when they make loans. [1] Alternatively you can read the Bank of England report on Money creation. [2] It's about the British economy but goes into further detail and the monetary principles are the same in every modern country. [1] https://www.kreditordnung.info/docs/S_and_P__Repeat_After_Me_8_14_13.pdf https://www.kreditordnung.info/docs/S_and_P__Repeat_After_Me... [2] https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m...
mercy_dude 5y ago
> This gives these people and organizations outsized influence to manipulate our government into staying in wars in order to justify buying expensive munitions. This destructive feedback loop is the true cost of war. Oh and you forgot the revolving door that exists between the military industrial complex and DC power Center. And how they influence the policy decisions. Our current defence secy for example is a former Rayethonian exec.

bsedlm 5y ago

> There is a productive apparatus and resources that feed it - what we are gesturing towards when we talk about “the economy”. They can be mobilized using flows of spending generated by public or private credit, to move in one direction or another. > It wasn’t pouring money into the sand. Most of the dollars flowed back to America. Fiat based money (in which currency -- circulating money, is actually debt) works fine when this money is used to build (and maintain?) infrasctucture, markets, industries, which can then "pay back" this debt; which can sustain a society. The truly sad part, most would agree, is that they'd use this for destructive purposes. First use fiat-credit to fund a war to break a foreign country and then loan out more credit to pay for rebuilding it. The end result is a transfer of (at least) ownership back to America.

avalys 5y ago

The simple explanation here is that 200 billion per year over 20 years is unquestionably a lot of money, but not large enough relative to overall US government spending ($7T per year) to perturb anything all that much.

hogFeast 5y ago

Reducing his analysis to MMT, as some here are doing, suggests that you don't know about Tooze's area of study. His magnum opus, probably one of the greatest books in modern economic history, looked at precisely these questions of govt spending being taken to the limit (in Nazi Germany). But, a bit like those who specialise in Japanese economic history, I feel like it is pretty misleading to base your argument for MMT on purely wartime measures: not only is the level of govt spending changing but the allocation of resources is changing...that is very different to a non-wartime economy where there aren't huge supply changes. After WW2, there was huge economic dislocation and inflation. But it seems very churlish to look at WW2 and say: there are no limits to spending. When: most economies in the world effectively shut down, trade shut down, there was massive destruction of supply, massive financial repression...financial repression in the US, by far the economy that was least negatively impacted, didn't end in truth until the mid-60s. The UK economy didn't recover in full until the 90s. Crowding out does occur. It isn't unusual. There is ample evidence of it occurring. It is dangerous to point out too that "there is no limit" and then fail to mention that your only sources for this claim are dictatorships or countries at war...there is a reason for this (it is often politically unpalatable to take control over production such that crowding out is prevented). The reason why there was no crowding out, to be blunt, is that these wars weren't very expensive. They provide no evidence to support the claim that: that we are nowhere close to the real limit on spending. Almost every industry right now has shortages, and the economy isn't close to full capacity because the labour participation rate is low? Rakakakakaka. I like Tooze but this is very weak stuff (it is worth pointing out though, that the last part of the previous paragraph is essentially the Fed's position...so we will likely find out who is right). It is also interesting that he didn't mention the 1920s more either...this is the ultimate "proof" that austerity makes no sense. But it is also worth pointing out that after WW1, lots of countries had the same issues after WW2. There were huge price changes in 1920 that basically felled the UK economy until the 90s (WW2 and US actions after were just the final nail in the coffin), it is quite foolish to suppose that the UK economy would have just magically recovered if the govt started spending...it was a supply-side issue, not a problem with demand (the US was the counter-point to this, the US started the decade with a relatively blank slate and this decade turned the US into a financial power competing with the UK...the UK was legacy, stuck with all the old industries that were shrinking, and struggled to retool after the war ended)...but yeah, usually every economic narrative that takes the Keynesian approach will mention 1920s UK...it is a classic (although misleading) example.

hamburgerwah 5y ago

I'm always amazed at the people that think that somehow if the government had not misspent these trillions of dollars on war that it could have somehow effectively spent it on massive health and education projects. The choice here was for a corrupt congress to dole out trillions in directionless war or dole out trillions in directionless health and education boondoggles. Also these same people seem to be against tax cuts. I think the federal government needs to cut about 700,000 federal jobs and we need to shrink the discretionary federal budget by at least 500 billion. If we don't, you will keep getting iraqs and afghanistans until we collapse.

FridayoLeary 5y ago

Its forgotten how many benefits warfare can bring to humanity. WW2 transformed the US into a global superpower and an industrial powerhouse of unprecedented scale. Technologies invented to aid warfare are improving the quality of life (e.g. aircraft, radar, computers, internet etc etc.) I think that the war industry actually brings us tremendous benefits with a good ROI.

macroninomics 5y ago

Michael Hudson's "Super Imperialism: The Economic Strategy Of Imperial America" explains: "When the US payment deficit pumps dollars into foreign economies, these banks (have) little option except to buy US Treasury bills and bonds which the Treasury spends on financing an enormous, hostile military build-up to encircle (today's) major dollar-recyclers China, Japan and Arab OPEC oil producers" - essentially a process by which they finance their own endangerment. From https://www.countercurrents.org/lendman010709.htm https://www.countercurrents.org/lendman010709.htm Additional links: https://mronline.org/2021/02/09/michael-hudson-changes-in-super-imperialism/ https://mronline.org/2021/02/09/michael-hudson-changes-in-su... https://www.youtube.com/watch?v=PtHX23Trvy4 https://www.youtube.com/watch?v=PtHX23Trvy4

3009629147 5y ago
I respect Michael Hudson but he is slightly wrong here. They can also buy U.S. stocks like the Swiss Central Bank does. [1] [1] https://sec.report/Document/0001582202-21-000003/?__cf_chl_jschl_tk__=pmd_ii6lmHcIZE0op5_M1UZNmOSSWExwbxXQ5lAVgyoHT.k-1629758865-0-gqNtZGzNAjujcnBszQal https://sec.report/Document/0001582202-21-000003/?__cf_chl_j...
- macroninomics 5y ago
  Yet the Switzerland is still one of the largest foreign of treasury securities: https://ticdata.treasury.gov/Publish/mfh.txt https://ticdata.treasury.gov/Publish/mfh.txt

tra3 5y ago

I'm confused. > If we want to criticize the War on Terror from a perspective that does not betray sensible macroeconomics, we should not rely on calculations of cost, or suggestions of crowding out to do the work for us. America could easily afford the War on Terror. How is "crowding out" still not a reasonable argument? Sure, he says you can print more money, but then you run against the constraints (like inflation) that he talks about earlier in the article. So there's a limit to how much can be printed, and does that not "crowd out" other potential spending targets?

elango 5y ago

Military, Finance and Health spending by govts in turn fill the pockets of Enterprises, hand in glove with central govts, I am unable to even think of a remote possibility on how to break this nexus.

jhallenworld 5y ago

The war is a failure of imagination. You are paying millions of people to work on the War on Terror. It's nice that they're all employed, that the rich get richer etc., but can we not think of anything better to do with our time?

anm89 5y ago

Hard to take anyone seriously who repeats the cartoonish idea that claiming budgets matter for governments is a fallacious attempt to conflate a government with a household. It is ironically an absolutely fundamental failure to understand the basics of public finance. If only someone had informed Zimbabwe that they could have kept on printing because government debts don't matter when you print your own currency. Anyway, believe whatever you want to believe. Americans who run their personal finances like dollar hegemony will keep them wealthy forever will pay the price in the end.

Nevermark 5y ago

The article says spending borrowed money on war doesn’t crowd out other economic goods. But of course it does. How money is raised and how it is spent are separate issues. You can say borrowing is ok, or not, for any given level. But what you can’t do is spend the same money on massive military activity, with little hold over value, and that same money on investments that increase productivity for a generation, like targeted education, research and infrastructure. Whatever you spend a dollar on, you have “crowded out” the alternative. And saying well you can borrow more isn’t a valid point. You just have more money, but you are still choosing one thing or another with every dollar. (In characterizing military activity as not an investment I am not addressing the case of wars that preserved our and our allies freedom, but the disastrous discretionary ones of the new century.) HOW you spend money is always a trade off, no matter where the money came from.