The Republicans are super-duper, really, really, really serious about cutting spending. I disagree. In fact, I don’t think they are serious at all. The Republicans in the House want to cut $100 billion of non-security discretionary spending from the fiscal year 2011 budget. This is a ridiculous way to reduce the budget deficit. The White House proposed budget for 2011 is $3.8 trillion. $2.4 trillion is non-discretionary (mainly social security, medicare, and interest on the debt). Defense accounts for about $850 billion. Discretionary spending, by contrast, is around $500 billion, or about 13% of the total budget. In fact, the projected budget deficit for this year is more than double all discretionary spending! Trying to “balance the budget” through “painful cuts” or by “eliminating waste, fraud, and abuse,” but fencing off 87% of that budget from any cuts makes zero sense. Even if Congress eliminated all discretionary spending, the US budget deficit would still be more than 5% of GDP. There is simply no way to reduce the budget deficit to manageable levels (2%-3% of GDP) without raising taxes, and/or reducing spending on medicare, social security and/or defense. None. At. All.

Springboarding from my last post on the possibility of the military as the United States’ remaining source of power, and Barak’s most recent writing on defense and foreign aid, I wanted to write a bit more on the conflict between foreign aid and military spending.  In the halls of Congress, it’s a rare thing to hear critiques of our military budget, in contrast with just about any other form of government spending.  Concerns over defense expenditures, conflicts of interests in contracting and our ever increasing love of outsourcing typically devolve into tried and true “support the troops” rhetoric.

Fortunately, I’m not a legislator and thus these subjects are fine for me to discuss.  A recent piece in the Atlantic by Andrew Bacevich explores the US’ current approach to military projects through the lens of Dwight Eisenhower’s commentary on the “military industrial complex”.  Perhaps during the height of the Cold War our military expenditures were genuinely justifiable (I certainly don’t believe so but at very least there’s room for argument).  With this great threat to war with an equally powerful nation finally behind us however, how unreasonable is it to expect military spending to taper off?

Even if one believes that it would be irresponsible to slow our pursuit of military dominance, does much real argument exist to explain the amount we spend on the military? Furthermore once our military budget is decided for the year, is there any effort put into determining how that budget will be allocated to varied projects?  These days every bit of Congressional spending on earmarks for local projects is scrutinized, why should our spending on military projects be any different? So often politicians tout the ability of the market to resolve our woes, but the cost of military spending does not obey any of the rules of the market, yet is vastly ignored by the ‘free market’s’ largest proponents.

If there’s a single rule I live by regarding US politics, it’s that one can always count on our legislators to keep their own interests in mind.  Their focus is almost universally on being reelected and maintaining whatever influence and power they’ve sunk their claws into.  Unfortunately, arguing against military spending isn’t in any legislator’s personal interests, period.  It can be difficult at times to argue over military spending as in contrast with the country’s GDP it almost seems reasonable, however it’s important to remember in the current congressional circus that the argument is over federal spending and the numbers on military spending as a portion of the federal budget are quite clear.

Ultimately my point isn’t to express complaint on the state of military spending but to briefly highlight one aspect of the absurdity of the current debate over government spending.  Is there a problem in our government’s current approach to economics? Obviously.  But does the current discussion in the political arena have anything to do with it? Not at all.  Focusing on tax cuts and ending “extraneous” pursuits like US foreign aid spending, is a perfect example of Congressional politics as usual and displays an utter lack of concern for any of the policies which landed us in our current mess.

Here’s a funny thing about the United States. If a police officer pulls me over for speeding and I offer to give said officer $100 if he/she forgets that I was speeding, that’s called a bribe and it is illegal. Yet if Corporation X helps elect a politician by spending a lot of money and that politician subsequently writes a law providing Corporation X with favorable tax treatment, it’s called free speech and is legal. Is there anything troubling and just a wee bit hypocritical about this?

We’re going to hear a lot of talk about reducing government spending over the next few months. I thought I might take this opportunity to talk about how to judge whether a proposal is serious or not. This might seem like a difficult question, but it’s actually quite easy: does it reduce federal government spending on health care. Why do I make such a bold claim? It’s not me, it’s the Congressional Budget Office:

The table makes it quite clear that the long-term budget problem we face isn’t social security, TARP, “the stimulus package”, foreign aid, or any other “runaway spending” program members of Congress love to denigrate. It’s certainly not earmarks. It’s not waste, fraud, and abuse. Nor is the problem gold-plated salaries and benefits for federal employees. It’s rising transfer payments from the federal government to doctors, hospitals, and pharmaceutical companies. So when some listening to our esteemed Members of Congress talk about how they are going to stabilize our budget, their proposals for slowing the rate of growth in health care costs are the only ones to take seriously.

By the way, repealing the Affordable Care Act (aka Obamacare) doesn’t count as reducing spending on health care. Obamacare saves money compared to the status quo ante. Those who want to repeal it thus exacerbate the problem of rising health care costs.

PS: Now that you possess this valuable knowledge, listening to budget debates will become much more painful. Members of Congress don’t want to talk about cutting spending on government-subsidized health care because, you know, a lot of people like government-subsidized health care. So do a lot of doctors, hospitals, and pharmaceutical companies.

In line with my last post on relationships between development and diplomacy,I feel compelled to discuss the relationship between human rights and foreign aid. Studying any of the Social Sciences, eventually one ends up tangled in the question of why people allow so many obviously horrible things to happen to other people?  We tend to pursue this question of human rights with such a measure of outrage, blended with bewildered naiveté, that by the time one stumbles into foreign policy it’s hard not to expect the worst to happen.  Yet governments around the world continue to discuss human rights as a central issue of international relations regardless of how unlikely it might seem based on policy.  As in so many other policy areas, the issue of human rights is clearly one of words vs. actions.

If one relied on press releases, official remarks and speeches alone for their information, it might seem only a matter of time until human rights violations are a thing of the past.  Human rights is perhaps one of the best examples of the divide between public diplomacy and changes in policy.  Particularly in the more influential nations of the world, human rights tend to conflict with many of more noteworthy policy concerns like economics and security.

In a way, stable yet less-powerful nations have the ability to be more sincere in their support of human rights, as obviously do non-government organizations.  From the European Parliament to Human Rights Watch, Freedom House to the government of Ecuador, strong commentary on human rights should be expected.  It’s easy enough to express outrage over government support of violent repressive groups, or state support of cultural or ethnic prejudice, but until powerful nations decide to shift from words to actions we shouldn’t be surprised by the current state of affairs.

Imara had a great post on Republican rhetoric about cutting foreign aid when they take control of the House of Representatives in January 2011. He didn’t point out a gem of a quote from Kay Granger (R-TX) who is seeking to become the chair of the State and Foreign Operations Appropriations Subcommittee:

I want to be sure that we aren’t increasing foreign aid at the expense of our troops.

I think this is notable (in a very sad way) for two reasons.

First, there is no tradeoff between spending money on foreign aid and defense because the budget is not a fixed sum.*

Second, for someone on the Defense Appropriations subcommittee and State and Foreign Operations Appropriations subcommittee, she sure seems confused about the relative levels of spending on each. Below I’ve got a helpful chart that shows these expenditures from the fiscal 2011 budget. In case you are not a math whiz, the graph shows that foreign aid expenditures are about 5% of defense expenditures. Beyond that, most US foreign aid these days goes to Afghanistan, Iraq, and Pakistan.** (I wonder why that is?)

I hope the chart reassures Rep. Granger that the US Government currently doesn’t seem to be facing a tradeoff between spending lots and lots on defense and not very much on foreign aid.

Update:

*Let me be more clear. Talking about a tradeoff between aid and defense makes as much sense as a tradeoff between: (1) defense spending versus and spending on the postal service; (2) more defense and larger budget deficits; or (3) more defense and higher taxes. Granger makes it seem as if there is a fixed line item in the budget for “defense and other overseas stuff.” This simply makes no sense.

**Plus Egypt and Israel.

Best Friends For Life

As Republicans gear themselves up to take over the House, the debate around the States’ finances, and the terror of Government spending is starting anew.  Unsurprisingly, among the potential targets for cuts in funding is the area of development and foreign aid.  As Barak mentioned in a previous article, domestically we’ve a pretty mixed up opinion when it comes to issues of foreign spending, and this flawed understanding is something legislators don’t hesitate to take advantage of.

I definitely wouldn’t argue that we’re doing everything right where foreign aid is concerned, historically we’ve a pretty shaky record in the area of aid.  Yet the type of results we tend to expect in the amount of time we’re willing to commit also tends to be fairly absurd.  It doesn’t take a genius to conclude that what we need isn’t less spending, or even more spending, but more effective spending, unfortunately we have a hard time agreeing on just what that means.

A few days ago Secretary Clinton spoke on the release of the first Quadrennial Diplomacy and Development Review or in government terms “QDDR” (oh how I hate acronyms).  The review aims to shape future changes in US policy in the areas of development and diplomacy, by among other things utilizing “civilian power” and getting agencies like the Department of State and USAID to work cooperatively.  If successful in bringing about any actual policy change, QDDR could nip some of the foreign aid spending rhetoric in the bud before our incoming legislators have a chance to go too far in gutting funding.