Obama Freeze Forfeits America’s Future

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obama toasting.jpgBarack Obama’s plan to unveil tonight a non-defense discretionary spending freeze for the next three years will essentially forfeit America’s growth future to China.
China has been massively investing in its high speed rail, its science labs, its educational system, its roads, its energy grid an its information super-duper highway. It has been obsessed with job retention and job creation. It has been building a mind-boggling number of every kind of power plant imaginable — natural gas, high end coal, low end coal. It’s investing in next gen renewable energy projects on a scale larger than the United States. It has been subsidizing all of this with a neo-mercantilist currency policy, pumping exports which it finances to consumers not only in the US but all over the world. China flaunts a robust “Buy China” requirement in its government and semi-private industrial procurements and contracting.
And the President of the United States, one year into his job, and still dealing with the tail winds of the worst economic disaster in global markets and the US economy since the Great Depression, is saying that he is going to freeze spending on virtually everything but the wars we have on hand.
America needs to invest in itself.
This economic crisis we continue to flounder in with effective unemployment higher than 19%, according to Leo Hindery’s valuable monthly head-knocking reminders, requires leadership and decisive, large scale action to make the investments in America and its manufacturing and innovation base that create recurring returns to the nation over time.
Obama’s team, content to have bailed out Wall Street, seem to now run the rest of the economy on a cash accounting basis. That’s bad, self-defeating policy.
What needs to be run on a cash accounting basis — that is not — is the part of the budget Obama seems not to want to rein in…..a huge, runaway bill to pay for Iraq and Afghanistan. In 2010, the cost of America’s Iraq engagement will still run more than $150 billion. And add to that $100 billion plus for Afghanistan.
One QUARTER OF A TRILLION DOLLARS is what the US is spending on two nations, Iraq and Afghanistan that together have a COMBINED GDP of just $23 billion.
That is lunacy. Americans have a US President who is going to say tonight — we cannot afford our future, we cannot afford investment in ourselves, but we can afford to bail out Wall Street financiers, and we can afford to pump $250 billion into two small countries abroad, but we can’t afford to do the right things by American working families — who deserve far better.
There are parts of what the President’s team is doing — particularly what Jared Bernstein, Paul Volcker and Austan Goolsbee have been working on — that I do support.
But the broader issue that we are going to cease deep investment in the US in a way that is big, significant and consequential — while China does everything the reverse that we are doing and reaps the rewards is a sign of America’s collapse, not America rebuilding itself.
— Steve Clemons

Comments

43 comments on “Obama Freeze Forfeits America’s Future

  1. David says:

    Be interesting to compare the popular mindset when FDR was trying to save capitalism from itself with the popular mindset now. Republicans could not so easily exploit the popular mindset back then, I’m guessing, but I don’t know, and I don’t know how one would establish that point. But it seems clear to me that Republicans are successfully exploiting popular backlash to block the level of government stimulus required to salvage the middle class, and ultimately the economy. If anyone is more myopic than Wall Street and the Republicans, please tell me who.

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  2. questions says:

    Nadine,
    FUNCTIONING MARKET
    Exactly.
    Bubbles are not functioning markets.
    They lack full information. They lack rational actors.
    And Dan, my “coming around” probably isn’t quite what you think! I’m using a metaphor here about bubbles and worth rather than saying, gee, war is too expensive. The only way to know if a war is too expensive is probably to do some kind of bizarr-o double blind study where in one version we have the war and in the other we don’t. We match up who lives and dies, who prospers and fails, in each of the systems. I don’t think this can be anything more than a thought experiment.

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  3. nadine says:

    JamesL, we were discussing the housing market. How would you determine the proper value of a house? Appoint a Housing Commissar to set the price?

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  4. Dan Kervick says:

    “The Cold War distorted security issues to the point that we no longer know what security is or what it’s “worth.” We seem to be willing to pay anything for something we don’t entirely understand.”
    Questions, I’m glad you are finally coming around to seeing the importance of the economic dimension of war and peace issues like Afghanistan.

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  5. JamesL says:

    Don Bacon: Not voting in a democracy is no solution. Starting a new political party may be a solution. Changing campaign finance laws might be a partial solution. Limiting power of any single group, or taxing the hell out of anyone (just for starters) who successfully games the system for their own benefit may be a partial solution. But opting out of the decision making process is no solution. Today the system has been gamed so long and so aggressively and so well with so much money that the problems are myriad and systemic. The problems are ensconced in law and regulation. And that also happens to be the biggest impediment to creating a sustainable nation. The technical problems of sustainability are NOTHING like the regulatory problems. Refusing to take part in any solution, or to even think about what a solution might entail, is no solution. It is exactly what those in power WANT people to do. GIVE UP! Just GIVE UP people. Don’t you know, you poor idiot sods, that you are licked?
    Questions: Security is a good neighbor–better yet a hundred or thousand–that you know you can count on when there’s trouble. It probably doesn’t get any better than that. THe Right wing and their handlers are busy day and night sowing suspicion that your neighbor is a Commie, a gay, a black, a rapist, a LIBERAL, a Palestinian, a druggie, a tin foil loony, a terrorist, a non-Christian, a not-good-enough-Christian, anyone who does not like ISrael, anyone who disagrees with the US Joint Chiefs of Staff, a Muslim, a foreigner, and on and on through an endless list that replays automatically when you get to the end. Reality is not like that. In reality there are a lot of good people, everywhere, who just want to get along with others.
    In 1999, when Y2K loomed as a possible problem, the head of the Washington State National Guard, who also entertained the prospect that it might possibly be a REALLY BIG problem, essentially said: “Don’t count on the Guard to help you. If things really get bad there will be no one left here. Everyone will head home to help their families.” He spelled it out: Don’t expect the government to save you. They won’t. Nothing has changed.
    Nadine thinks that only a functioning market can define worth. What a deplorable God forsaken loon. How would you like to be her friend? How would you like her as the neighbor of your deaf and failing mother who lives alone? How would you like to have to rely on her? What’s my market value today Nadine?

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  6. Carroll says:

    Posted by Linda, Jan 27 2010, 7:30PM – Link
    >>>>>>>>>>>>
    Yea, I know.
    And also it’s revealing when you rummage around in the catagories the IRS shows to see exactly what all is included.

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  7. nadine says:

    questions, the only way anybody ever knows what anything is worth is through a functioning market.
    If you begin screwing around with a market so it stops functioning properly, then you no longer know what things are worth. That way leads bubbles and crashes (yes, markets can crash on their own, but it’s much more likely when you have pols screwing with’em).
    The proper question after a crash is not, ‘how do we reinflate the bubble?’ but ‘what conditions will return this market to functioning?’

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  8. questions says:

    I think Obama inherited more than the housing bubble. In my estimation, he inherited a valuation bubble; that is, we have no idea at all what anything is worth (not that I want to reify “worth,” but it may be a useful concept anyway.)
    The Cold War distorted security issues to the point that we no longer know what security is or what it’s “worth.” We seem to be willing to pay anything for something we don’t entirely understand.
    American hegemony was itself a bubble as it made us feel we didn’t need to take into account the internal desires of other nations — and yet at the same time we built a bubble around intense anxiety about the internal desires of the same nations we weren’t supposed to be worrying about. (read Cuba)
    Every congressional district contains its own defense-spending bubble, a panic about re-election bubble, and even a bubble in the MC’s own estimation of his/her own wealth.
    All these bubbles are bursting in air while Obama watches and tries to refigure values.
    Remember, none of us really knows what our homes are worth as the housing market collapses, what our stock portfolios are worth as the stock market dives, what our derivatives are worth as that market tanks. In similar fashion, we no longer know what any single policy is worth as we have lost all sense of what we should be doing and what we should be paying.
    What speech could anyone give? What direction could anyone go?
    We all know not to overimprove a house as you will simply lose your investment. Similarly, “overimproving” people via education when there are no jobs for people with those degrees becomes a divine work of soul improvement but not a practical work of worker-to-job matching. Overimproving transportation and all the other things we’d like to do may also be equally noble but economically useless. We actually don’t know because we actually don’t know what anything is worth without some stable valuation system — the very thing we lack in the first place.
    The temptations, then, are to placate the old desires, the old powers, the mature industries — none of which is particularly helpful anymore, but all of which still hold us in thrall.
    There is no speech that will work because there is no policy that will work because we don’t really know what it is we should be doing.
    Whether or not we can figure out what security is and what it’s worth, what development is and what it’s worth, what anything is and what it’s all worth is the problem set of the day. I wish us well. But I kind of doubt that we’re going to get too far on the re-figuring thing given how unfun it is to find out that you’re not worth much.

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  9. Linda says:

    Well, there isn’t much to add to such agreement.
    I did post here around the end of another recent thread my belief that the high point of the American Empire was 1968 with gradual descent since then, perhaps not noticed. Empires usually end when they spend too much on foreign wars.
    Carroll, one thing your figures don’t know is the smoke and mirrors that LBJ started by putting SS into the general budget and borrowing all the surpluses that were there. Remember all the talk about “lock boxes” late in Clinton Adminisration and when Gore was running. If SS money had been held separate rather than borrowed to finance wars, it would be solvent for many more years.
    John Waring, I was going to suggest that Steve add Elizabeth Warren to the list of good financial advisors. She is a breath of fresh air and communicates so simply and clearly–just plain common sense with determination and even a smile and sense of humor!

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  10. Don Bacon says:

    Interesting subject, nadine
    *NAM believes that corporations pay way too much (about 39.1% on a statutory basis from state and federal sources) to Uncle Sam. That’s the second-highest in the industrialized world. Only Japan’s 39.5% is higher, according to the Tax Foundation, which wants the U.S. to follow the lead of other countries and lower its corporate tax rates.
    *One corporation (Exxon Mobil) pays as much in taxes ($27 billion) annually as the entire bottom 50% of individual taxpayers, which is 65,000,000 people. [Note: that’s about two weeks of Pentagon spending.]
    *Corporate income tax collections will double by 2012 as tax breaks enacted as part of economic stimulus legislation expire, the Congressional Budget Office projected Tuesday. Part of the increase is attributed to an expected rise in corporate profits, CBO said.
    So since they’ve got a lot of skin in the game corporations are motivated to control the government that they finance.

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  11. nadine says:

    Don Bacon, you are forgetting one of the main things driving jobs offshore: the US has the highest corporate taxes in the developed world.

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  12. Carroll says:

    Let me add that back during the 2008 campaigns Paul and others outside the establishment party machine were saying much the same thing as Steve has just said and as I and others were saying…Invest in America, Bring it Home.
    People put them down and made fun of their… ‘mavrick” “looney” talk and opinions.
    Who’s laughing now?

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  13. Outraged American says:

    The mystery of no policy change is because Israel wants us to
    fight her wars. We are not our own country anymore. Our
    country has been sold to that shitty little nation by our own
    immensely corrupt “representatives.”
    Again, Avigdor Lieberman, Israel’s Foreign Minister, said in
    March of 2009 that Afghanistan and Pakistan were the two
    greatest threats to Israel. Lo and behold they then become one
    country called “AfPak.”
    And before that, in 1996, Douglas Feith, who went on to be #3
    at the Pentagon, and Richard Perle, who went on to become
    chairman of the Defense Policy Board, and the Wurmsers, the
    female member of whom, Meyrav, went on to found one of the
    leading pro-Israel propaganda outlets, MEMRI, which to this day
    is used by the US mainstream media to mistranslate everything
    out of the Muslim world, wrote the Israeli manifesto for
    Benjamin Netanyahu, the one that we are seeing in action today
    “A Clean Break: A New Strategy for Securing the Realm.”
    Read it and weep, because soon you’ll be weeping in bread lines
    and over your children’s graves. Israel and her operatives are
    our greatest threats, and those include almost every member of
    the US Congress.

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  14. Carroll says:

    Steve,DonS,Robert,Tom,JohnH,Don Bacon,POA,David,Timn,Auerbach,ken Francis, Gypsy,…,JamesL,erichwwk,John Waring.
    DITTO
    Consider:
    US Income- source IRS
    SS, medicare, unemployment taxes, retirement taxes = 30%
    Personal Income Taxes
    =39%
    Corporate income taxes = 10%
    Excise, customs, Estate taxes =6%
    *Borrowing to cover the Deficit =15%
    US Outlay
    SS, medicare and other retirement =37%
    Social programs,Educ.,etc =20%
    Community Development,Deposit insurance,,commerce, health science research etc , =9%
    National Defense. military,foreign aid
    =24%
    Law enforcement
    =2%
    Net interest on the debt
    =8%

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  15. JohnH says:

    I encourage everyone to VOTE early and frequently. But VOTE FOR NEITHER Republiscum or Democrap. VOTE FOR ANYONE BUT. Vote for somebody who can’t afford TV advertising.
    I’ve done it many times. And I don’t regret it once.

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  16. John Waring says:

    Elizabeth Warren to Jon Stewart on financial reform:
    “Well, these guys really do get it.” Warren told Stewart — the CEOs, bankers, and people in power — “They get it. And they work best behind closed doors.” If the decisions are in their hands, she said, “Nothing, nothing will change. You know, I want to turn to these guys sometimes, and I want to say: what part of ‘we bailed you out’ do you not get? These are people who would not have their jobs because they would not have their companies.”
    Considering the good my vote did me the last time, maybe the next time I might as well write in Elizabeth Warren for President.
    I voted, hoping and praying for an FDR, and I think a got a Hoover — that, or I’m living in a parallel universe. A democratic president with 20% unemployment putting every program for job creation in deep freeze for three years, while we spend untold billions of dollars in pointless wars with no payback. Yup. Scottie must have beamed me up, because this can’t be planet earth.

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  17. erichwwk says:

    Outstanding post,outstanding strategy, steve.
    Of course lunatics, like a mother bear who feels her cubs are threatened, are often the most dangerous.
    While the US spends trillions making enemies, China makes friends and skims off Afghan resources WITHOUT requiring troops and guns:
    http://www.nytimes.com/2009/12/30/world/asia/30mine.html

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  18. Don Bacon says:

    I doubt that leaking the SOTU is novel.

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  19. Don Bacon says:

    JamesL,
    You don’t see a solution in the current system, but Marlene Connolly does, and she acted on it.
    Another way to act is what thirty-eight percent of the electorate did in the last presidential, they stayed home and in effect voted for none of the above.
    In a two-party system which causes the two parties to look and act similarly, there are no other choices available to vote against current policies that one disagrees with.

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  20. nadine says:

    “I’m not totally sure of the numbers, but I believe non-Pentagon discretionary spending is about $600bn, so a freeze with a 2.7% inflation rate would be about $15bn, this in a national budget of $3.6tn. Fifteen billion? — the Pentagon spends that much every week, week in, week out, every week. So Obama will manage to piss off his base (again) while not really accomplishing much of anything. Change? Yes — even Bush didn’t do that.” (Don Bacon)
    Yup, Don, that’s what it is…this year’s budget is running a deficit of $1.5 Trillion, so it’s a 0.1% cut in the deficit, if that.
    Obama thinks we are really, really dumb and don’t know the difference between “billion” and “trillion”.
    Maybe Obama will upset everybody; his base who don’t understand the difference and think he’s actually doing something; and everybody else, who does understand the difference and understands that Obama is doing absolutely nothing.
    And Steve thinks this ludicrous fake little “cut” will forfeit America’s future? As opposed to adding another $10 Trillion of Debt in 10 years, what does Steve think that will do to our future?!

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  21. JamesL says:

    DonB: >Throw the bums out is Ms. Connolly’s strategy, and it extends to anyone who sides with the bums…she’s mad as hell and she’s not going to take it any more.
    So this means that Ms Connolly would have voted in the Nazis out of spite for the weakness of the alternative?
    It seems to me the answer is not to vote for people you know don’t have your best interests in mind, out of spite and anger, but find someone who does, or hold those who said they would act in your best interest accountable if they don’t. Seems there’s a systemic weakness here: what to do about candidates who say one thing to get elected and then do something else. How does that problem get solved? I don’t see a solution present in the current system.

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  22. DonS says:

    ” . . .if Obama took MA as a wake up call, and he Really Knows What’s Going On, why the leak of the State of the Union Enfeeblement Plan for America?” (MarkL)
    Don’t ask me, I’m just putting some pieces out there. Nothing adds up to a new direction, a new awareness, or a new commitment as far as I can see.

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  23. Don Bacon says:

    Politicians have election strategies, and so do voters.
    from the NY Times:
    “I’m hoping that it gives a message to the country,” said Marlene Connolly, 73, of North Andover, a lifelong Democrat who said she cast her first vote for a Republican on Tuesday. “I think if Massachusetts puts Brown in, it’s a message of ‘that’s enough.’ Let’s stop the giveaways and let’s get jobs going.”///
    Throw the bums out is Ms. Connolly’s strategy, and it extends to anyone who sides with the bums. A lifelong Democrat, she’s mad as hell and she’s not going to take it any more.
    Way to go Marlene! Democracy in action.

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  24. JamesL says:

    So Don, if Obama took MA as a wake up call, and he Really Knows What’s Going On, why the leak of the State of the Union Enfeeblement Plan for America? I’m asking for a serious response and don’t mean to be snarky except toward that which seem to invite maximum snark.

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  25. DonS says:

    Obama took Massachusetts as awake up call; said he got swept into office on the same anger at Washington and lack of change in Washington.
    But did he take the more refined and accurate message, confirmed in follow up polling, etc., that the disgust, and sitting on hands in Mass. reflected anger at the president’s lack of doing anything more than giving lip service to practical progressive actions, much less actually pushing a progressive agenda?
    The whole attempt by the right and center right to interpret and hijack the meaning of the results in Mass as supporting their agenda, rather than a biproduct of base disaffection, is understandable, but credulous and misleading. We’re talking Massachusetts, not Mississippi.

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  26. JamesL says:

    I concur with what amounts to a unified body of comments above. What is striking is rapidity of the sea change of opinion from “giving Obama the benefit of the doubt for the time being” to “this is wrong in so many ways”. Certainly some here have been comdemning Obama for a long time, and movement has been continual. But what is now striking is the nearly complete movement in that direction by most other posters, not the least Steve who has been a model of equanimity.
    Obama’s “plan” to 1) freeze domestic spending, 2)keep the dollar flow open to the military, and 3) anticipate an 11% budget increase is misleading. Because the US runs a budget deficit, this really means that taxes paid by humans will be increasingly spent on multi-national (read that corporations which do not have allegiance to the US) corporate welfare, and will be accompanied by a planned increase in national debt which, as Steve points out, amounts to mounting economic slavery of not only the current generation but future generations.
    I can imagine only one advantage to the direction Obama has allowed to be leaked: Establishing a domestic spending freeze while allowing military
    spending and debt to continue will bring into increasingly stark relief to the public the reality of economic slavery to war profiteers and MAY lead to a coalescing of public opinion against the military industrial complex. That’s a slender reed, and it does not avoid, and in fact accepts the fact that humans will increasingly suffer. We should have been smart enough to not have to get to this point, but that’s exactly where we are.
    In terms of magnitude of the crisis, I report from middle America that I personally do not know a single person who is not being harmed, continually degraded, and enfeebled by the current situation. In other words, that amounts to everyone I know–mothers, fathers, children, military vets, doctors, plumbers, professionals and blue collar workers of every stripe (whether they believe it or not)–everyone. Obviously I do not reside at the public trough, nor at the social nexus of those who have built pipelines there so they don’t have to lift a finger.
    In terms of longer term goals, Obama’s reported “new course” is just about as far from any hope of a sustainable society as is possible.
    “I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. . . . corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor  to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.”
    Abraham Lincoln

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  27. ... says:

    great post steve… i hope it can make a difference, but i wonder….

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  28. gypsy howell says:

    Long time daily reader, seldom commenter here. Thanks for saying
    this, Steve. Important people are much more likely to listen to you
    than they are to some lowly little voter like me, so I hope your
    message gets noticed by people who might be able to influence
    things. I feel more despair now for our country’s ability to get on
    the right path than I did even in the darkest days of Bush Cheney’s
    reign.

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  29. Ken Francis says:

    Mr Clemons
    I appreciate your blog. I feel you are ‘spot on’ regarding the Afghan/Iraq commitments. But the mystery remains: how/why has the US Government been able to make such commitments? Is there no common sense in the polity? Many agree with you but there is no fundamental policy shift – even after changing President. Shades of Vietnam…. Explain this mystery of no policy change. What are they frightened of? Surely a bigger security threat is a broken economy and badly educated population?

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  30. DonS says:

    We need to break the political mold and get acknowledgment and massive action to address:
    1) misguided, military industrial-stoked endless war that neither Obama or any ‘serious’ politician’ is willing to address. National security demands brains not trillions of wasted dollars.
    2) drowning middle class; crumbling infrastructure is where the attention needs to be focused
    3) bubble creating financial instituions, still without break-up action/authority or needed new regulation; only rhetoric from Obama team. Elizabeth Warren seems to be one of few who a) get’s the seriousness (failed country!) b) sees the simple,nose on your face route to gain control over economy breaking corporate financial structure (regulate, regulate, regulate)
    http://www.huffingtonpost.com/2010/01/27/elizabeth-warren-the-chip_n_438379.html
    If Obama thinks he is awake now, he’s dreaming.

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  31. TimDC says:

    Our man has muscle. Steve’s post is the top post on Huffington Post today, front page. Good work Steve. The White House will have to read your take on this. And you are so right on all of it.

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  32. Don Bacon says:

    This unemployment, which as Steve points out is actually nearer to twenty percent, is not cyclical and it won’t just go away as time goes on (which it always does).
    This unemployment is deep and it’s pervasive. It’s a result of US “free trade” policy, as well as other policies, to outsource US jobs to increase corporate profits. These policies have been implemented under direction of the Commerce Department, with cooperation from the US Chamber of Commerce including its overseas offices and with the full support of the US State Department’s overseas ambassadors.
    Domestically job outsourcing is now being facilitated by an outsourcing industry which includes hundreds of firms that can help corporations increase productivity and profits while reducing employment.
    Until these policies are uncovered and addressed, and until the US stops prioritizing profits over employment, there will be no assistance for US workers and the downward spiral will continue. And that seems to be just fine in whatever administration is currently in power, including this one.
    Politicians run on corporate donations, and we ain’t seen nuthin’ yet, what with the Supremes chiming in.

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  33. Michael Auerbach says:

    Congrats on top post at Huff… The President needs to realise that 10% unemployment in the US and 10% growth in China does NOT = 20.

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  34. Don Bacon says:

    It gets worse: Fifteen billion is also chump change when one considers that the money guys that surround Obama make the Pentagon look like a piker, what with sloppy accounting at the Fed and Bernanke refusing to tell Congress about the more than $2 trillion in taxpayer-backed secret loans.

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  35. David says:

    We have met the enemies, and they are the “defense” budget and the misguided “national security” mindset that Republicans have exploited so effectively and Democrats stand in fear of.

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  36. PissedOffAmerican says:

    Price of US Wars: $1 Trillion and Rising
    Direct Spending Reaches New Milestone
    by Jason Ditz, January 26, 2010
    The Congressional Budget Office’s newly released budget outlook notes that Congress has approved over $1 trillion in direct spending on wars and war-related activities since 2001, and that price tag is only getting higher as the wars drag on.
    The spending was divided between $708 billion for the Iraq War, $345 billion for the Afghan War, and $22 billion for assorted other war activities in other countries. The Obama Administration’s repeated projections of a lower budget output for wars in coming years aside, they show no sign of slowing.
    The estimated price tag only includes direct costs incurred as a result of the US occupations of those nations, and does not include the trillions of other dollars spent on the military since 2001.
    Nor does it include the overall cost of the war to the American economy, a figure economists put at several trillion dollars years ago, and which has only risen as the US presence overseas continues to grow.
    continues…….
    http://news.antiwar.com/2010/01/26/price-of-us-wars-1-trillion-and-rising/
    Truth is, we have been sold out. And where is the two trillion that Zakhiem managed to misplace? Israel?
    These pieces of shit in Washington DC haven’t got a clue what it is like to live hand to mouth, to lie awake at night hoping no one in the family gets sick or injured because you can’t afford the insurance.
    I can barely watch these pompous elitist sacks of shit, posturing before the cameras, fat, wealthy, completely detached from the people they are supposed to represent. There is NO WAY I will watch Obama tonight, because it doesn’t matter what he says, his actions NEVER match his words. No doubt he will eloquently hand us a ration of garbage tonight.
    These fat pompous elitists are running this country into the ground, while they place our sons and daughters in harm’s way to secure the future assets of corporations that have no national allegance.
    Fuck ’em. They long ago ceased being what the Founding Fathers intended them to be. Carroll is right, we oughta burn the whole thing down and start over. But we won’t. We’ve been complacent and unengaged for far too long. Just read the content and commentary here, and note the indifference expressed for our “leaders” complete and utter disdain for the rule of law. Our nation has not only strayed afar from what it purports itself to be, but now the people have seemingly forgotten and discarded any understanding of what that actually is.
    It’s a damned shame that its so interesting to perceive and to discuss, because most of us would be far better served by spending the time putting in gardens and fattening a steer. It may be that such actions are a far more realistic manner of securing our futures than nurturing a 401K is.

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  37. Don Bacon says:

    Pentagon corporate welfare, too-often euphemistically called “security” and “defense” spending, can’t be touched, the story goes, because in an endless war Americans have to perpetually “support the troops.” This includes not only actually supporting the troops in the country’s misbegotten wars but also maintaining the US military Empire elsewhere.
    The Pentagon is currently building a new military city in South Korea, for one example, complete with multi-story apartment buildings, schools and gymnasiums because Korea is so safe that military families can now go there. But the war facade must remain, so the US has recently declined a North Korean offer to end the Korean War. It’s not time yet, after almost sixty years. That’s just another example of how we must continue to bankrupt the country “supporting the troops” who are non-essential to US security.

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  38. Don Bacon says:

    Steve is of course right on the money (pun alert), particularly appraising US expenditures abroad. But there’s so much profit in it! Plus we should be investing more in a green economy, that’s for sure.
    The shame of this is that it manages to send exactly the wrong signal while not really accomplishing much. Well, it’s the right signal to the Blue Dogs and the Repubs but not to Obama’s base, and not to the rest of the world and not to America’s future.
    I’m not totally sure of the numbers, but I believe non-Pentagon discretionary spending is about $600bn, so a freeze with a 2.7% inflation rate would be about $15bn, this in a national budget of $3.6tn. Fifteen billion? — the Pentagon spends that much every week, week in, week out, every week. So Obama will manage to piss off his base (again) while not really accomplishing much of anything. Change? Yes — even Bush didn’t do that.

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  39. JohnH says:

    It’s official. Obama has surrendered. The federal government is done providing stimulus. The US is now on the same glide path as Japan 20 years ago. The only difference is that the US is wasting more than a $Trillion annually on “defense” at a time when it faces no significant external threat. And all the “defense” spending in the world will not improve the US infrastructure or increase its productive capacity. My infant grandchildren will not see an end to the Great Recession until sometime in their adult lives. As Steve says, “this is lunacy.”
    And, as Tom says, “The US is simply not able to address its major problems in a serious way because of its broken political system.” My guess is that there are powerful people waiting in the wings who will take it upon themselves to change all that–as soon as most of the public can be convinced that the current democratic system is not salvageable. Then things will get even worse.

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  40. Tom says:

    Steve, apparently you have not been paying attention these
    last few years. The US is simply not able to address its major
    problems in a serious way because of its broken political
    system. The US has already fallen off the ledge. The freefall
    does not hurt. Time will tell how much damage the landing
    does.

    Reply

  41. robert says:

    Steve and The Washington Note,
    Awesome post. Thanks for being so honest about this. We are
    eating our seed corn as a nation and doing nothing to invest in
    our future the way that we used to do. This is horrible for our
    children and grandchildren.
    I don’t believe in financial recklessness, but I do believe in
    investment. We have been getting recklessness from Lawrence
    Summers and Obama and not investment in the real workers and
    the real backbone of the real economy.
    I couldn’t agree with you more Steve.
    I am new to this blog, but I promise to become an avid learner
    and reader here.
    Thank you.

    Reply

  42. DonS says:

    It’s smoke and mirrors. The big picture, the big, obscene expenditures on war, get not just short, but NO schrift. We cannot talk about their costs in relation to the needs of the country which are never considered to be competing needs because the controlling class has decided to make it that way. And in that controlling class I include the media which rarely questions the equation.
    Obama is trying to pull off the trifecta; continue to open-endedly fund endless war; pretend to get the budget under control with a freeze (while ignoring the military component); pretend to fund essential domestic programs adequately in the guns and butter mold.
    If he were serious about changing direction, he wouldn’t mount this charade. He wouldn’t just change the optics. He would fire Gaithner, Summers and, preeminently Rahm. Even as mere symbols, which of course they are not, it would indicate a president with actual and active cognizance, not one who cogitates and poses and let’s the same old actors come up with the same suboptimized solutions.
    And then hire some folks with actual productive ideas, not just blab about “fighting” for the people, and floating gratuitious, self elevating talk about being a good one termer versus a mediocre two termer. Uh, Earth to Barack: we make that call, not you. And it ain’t looking good for even the former.
    I’m afraid it’s gone and getting goner every day so to speak. The public is so jaded on politics and politicians, especially at the federal level. And yet, for a brief, and perhaps misguided moment, the country carved out an exception for Barack Obama. So far, when he should have multiplied the force of the initial good will and support out there, he blew it. A gut punch to the optimism he inspired. A massive miscalculation and exercise in back room politics that has failed miserably, and an incredibly naive and/or hubristic display of denying the writing the repubs have been putting on the wall all along: “we are not going to play; not now, not ever”. Or a masterful con job?
    Some say it was never in the plans anyway. Doesn’t matter. It’s done. And still we wait for a signal that Obama really get’s it.

    Reply

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