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Super Committee Failure Not a Bad Thing: Why Doing Nothing May Prove Beneficial

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Failure to reach a deal by the Super Committee on Monday would result in an automatic sequestration, which is essentially a fancy Washington term for automatic across-the board spending cuts.

The Super Committee was created as a result of the the "Budget Control Act of 2011" on August 2, 2011 after many months of a budgetary impasse on the debt ceiling debacle. This Super Committee was formed from a group of 6 Democrats and 6 Republicans and charged with reducing the budget deficit by $1.5 trillion using any combination of tax increases and/or budget cuts in a bipartisan manner. Sunday Democratic and Republican aides confirmed to CNN that the super committee appears to now be focused on how to announce the failure to reach a deal (1).

Failure to pass any agreement would result in $1.2 trillion in automatic spending cuts over ten years across much of the federal budget and would start in 2013. These cuts would be dispersed evenly across defense and non-defense expenditures where $600 billion would come from cuts in defense spending and $600 billion would come from cuts in domestic spending. It was thought that the threat of defense cuts might force the Republicans to enter the negoitations in an honest fashion. Maybe they thought the Democrats would buckle and in any case neither side has so far blinked. Now Defense Secretary Leon Panetta is warning Congress that such automatic cuts to the defense department could cripple the American military establishment (2).

"Cripple" might be a bit overstated. In 2007 US spent $623 billion on military expenditures or more than all of the rest of the world including China and Russia which equalled roughly $500 billion.


2007 Defense Spending by PSN


In fact, the United States has consistently spent more on military expenditures than the rest of the world combined including both China and Russia. The automatic $600 billion in defense cuts from a failed Super Committee agreement would occur over 10 years making it roughly $60 billion in cuts per year. Considering the defense budget will be about $741 billion for 2011, $60 billion is about an 8% cut. Even if China were to double its military budget our 8% cut would still allow us to spend about the same in military expenditures as China and nobody expects China to double its military budget next year (3).


For decades now there has been no political will on either side of the aisle to do the right thing and try to reign in the runaway spending of the military industrial complex.

President Obama promised to cut $400 billion from the defense budget over a 12-year period and these "proposed cuts" would come from an overall national security budget of approximately $1 trillion a year. His proposed cuts would represent a mere 3% cut in spending. This may be one of the most ambitious proposed cuts to defense spending in recent memory by a U.S. President but sadly this proposal has no chance of ever making it through Congress and actually being enacted (4).

A quick history lesson, our massive growth in military expenditures, the rise of the military industrial complex and the advent of obscene war profiteering started even before our official entry into World War I.

World War I began for corporate America long before it started in terms of American blood and sacrifice by the middle class. Within two months of the conflict's August 1914 beginning, Charles Schwab, president of Bethlehem Steel, and one of the world's largest arms merchants, took a profitable trip to London. There, he secured orders from the British government for millions of artillery shells, as well as ten 500-ton submarines. Though the construction of such foreign vessels broke the law, Bethlehem proceeded with the contracts and the Wilson administration never tried to stop it. The company earned $61 million in 1916, more than its combined gross revenues for the previous eight years (5). In 1917 the United States officially entered the war. The Wikipedia entry for Charles Schwab adds that during the first years of World War I, Bethlehem Steel had a virtual monopoly in contracts to supply the Allies with certain kinds of munitions. Schwab made many visits to Europe in connection with the manufacture and supply of munitions to the Allied governments. During this period Charles Schwab circumvented American neutrality laws by funneling goods through Canada (6).

At the same time the international banking firm of J. P. Morgan in New York was also having a bang-up time of its own in war profits. The company had already loaned Britain and France $2.1 billion, and had cleared $30 million in profit. Adjusted for inflation this would be more than half a billion dollars in today's profits (7).

But not everyone agreed with the "profit is always good" mantra and things got so bad in terms of war profiteering in World War I that even military leaders began to voice their concern and displeasure with the corporate war machine. In 1935 Major General Smedley Butler, USMC, criticized war profiteering of U.S companies during World War I in his book "War Is a Racket". At the time of his death in 1940, General Smedley Butler had been the most decorated Marine in U.S. history. His book described how some companies and corporations increased their earnings and profits by up to 1700% and how many companies willingly sold equipment and supplies to the U.S that had no relevant use in the war effort. To the displeasure of many war profiteers he also described the workings of the military-industrial complex (8).

Even past Presidents have voiced warnings about both war profiteering and the growth of the military industrical complex. President Franklin D. Roosevelt in World War II was quoted as saying, "I don't want to see a single war millionaire created in the United States as a result of this world disaster." President Eishower made an even more prescient warning on January 17th, 1961 about the rise of the Military Industrial Complex saying, "In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist". A less common quote from Dwight D. Eisenhower's presidency highlights the current budget mess our entire country has found itself in and in no small part because of two unfunded wars started by President George W. Bush. President Eisenhower said the following, "Every gun that is made, every warship launched, every rocket fired, signifies in the final sense a theft from those who hunger and are not fed, those who are cold and are not clothed".

So you see having an obscure process called sequestration forcing an 8% reduction in military spending, which could not easily be pinned on any one political party, might be the best possible thing that could happen with the failure of the Super Committee. Everyone would find out that the world would not end, we would not be invaded and we would STILL lead the whole world in military expenditure spending.

 

Eric Nelson is freelance writer, an editor at OpEdNews, and a spiritual progressive from Minnesota who has become more politically active. The reasons for this should be obvious to most; rising poverty, a broken health care system, and a growing (more...)
 
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The Republicans Sacred Cow, the military industria... by Eric Nelson on Monday, Nov 21, 2011 at 12:07:35 AM