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Weapons That Didn’t Work Out

by reader ilsm
The Campaign to Preserve Pentagon Waste is in High Gear:

From Forbes, Defense Advocate Loren Thompson:
How To Waste $100 Billion: Weapons That Didn’t Work Out

One of the most unsettling facets of federal finance is the way the government devalues past investments. The political system is so focused on the next budget — and the next election — that it ignores sunk costs. Thus, every program termination is considered “savings,” without regard to the money that was spent to get the project in question to its current state.”
“This fiscal myopia is especially pronounced in the defense budget, where the government makes most of its capital investments. Cancellation of weapons systems that have been in development for a decade or longer is typically greeted as evidence that policymakers have made “hard choices” and had the courage to stand up to the “military-industrial complex.” The fact that previous administrations may have spent billions of dollars trying to satisfy a valid military requirement is barely mentioned — as is the fact that future administrations will have to spend additional money starting over on a replacement project.

Thompson is not an economist. More here.

What Thompson is advocating is to continue throwing good money after bad, which is poor economics; decisions on future “investments” need to be made on the performance of the project and the continued need for the projects’ performance. Neither are evident in the “defense” cuts that do indeed go against the jobs and PAC funding of the “military-industrial complex.”
For example, the F-35 should be killed based on failed tests, over runs delays and dangerous outcomes in several critical safety issues.
Walking away from the $50B is a problem for Thompson, but it will free up nearly $1000B in the next 20 years for uses that work, and benefit the US.
The “don’t throw good money after bad argument” was made in “Of Mice and Economics Dan Seligman, Forbes Magazine, Aug 28 1998 (Dan here…Also see Naked Capitalism US Wars are far from over)

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War taxes?

by Linda Beale
(cross posted at ataxingmatter)

One can question the timing of implementation, but can one argue against the financing? …Rdan

War taxes?

Since Bush invaded Afghanistan in 2001 (and then, Iraq), we have been paying for war as an afterthought. In the Bush era attempt to treat war as something that happened “over there” and didn’t disrupt the credit-fed consumer binging happening “over here,” there were no pics, no war bonds, and certainly no war taxes to pay for it. Instead, we actually cut taxes year after year after year, reducing government revenues at a time when we were passing supplemental appropriations year after year after year to pay for the war. With reduced taxes and increased military spending, that meant we borrowed to pay for the war of choice that Bush led us into.

In most wars, this country’s citizens and leaders have been somewhat wiser on the fiscal score. In the past, we generally raised taxes to pay for the huge expenditures that war necessitates–for caring for soldiers overseas and after they come home, for tanks and trucks and planes and drones and all the guns and missiles, not to mention warships and fuel, the construction of bases and building of roads and provision of power and all the other expenses of going to war (including, increasingly under Bush, the privatization of the military and the much higher costs of contracted mercenaries compared to Army soldiers and of Halliburton cafeterias that, in quite a few cases, didn’t serve the food they charged the US for).

Now that Bush and much of the Bush Congress are gone from office, it’s time to look at the costs of war when we think about what our tax burden should be. As one writer notes:

[O]ne thing literally everyone agrees Vietnam showed, from flaiming liberals to fire-breathing neocons, is that it’s a very bad idea to get involved in a long, grueling, expensive war without explaining to the American people how much they will have to sacrifice, and securing their support.” The Economist, David Obey’s war tax (Nov. 27, 2009).

David Obey, chair of the House Appropriations Committee, introduced on Nov. 19–with 10 Dems as co-sponsors–the “Share the Sacrifice Act of 2010” to do just. See Pincus, If It is to be fought, it ought to be paid for, Wash. Post, Dec. 1, 2009. How? by adding a graduated surtax, in 2011, to the income tax for those earning more than $30,000 a year. The rate would be 1% on incomes up to $150,000 and more above that–generally, a few hundred dollars, with the rate on higher incomes set to generate enough revenues to pay for the prior year’s cost of being at war, with returning GIs and families of those killed in combat exempt. And the surtax could be delayed (from 2011 to 2012) if the economy is weak.

The article notes an irony that has been mentioned also in the context of the health care reform debate about paying for government action. IN health care, many of those (especially republicans) who argue that “oh no, we can’t do this to fix the health care system, it costs too much and will create deficits” are the same ones who supported the series of Bush tax cuts that led to huge deficits, and their argument was “deficits don’t matter.” In the war tax debate, many of those most eager for further commitment to Afghanistan are unwilling to support taxes to pay for the conflict rather than living on borrowed money. (Or, they’d probably be willing to cut various “entitlements” for the vulnerable amongst us, even while extending even more “entitlements” to corporate taxpayers those who own significant financial assets in the way of further tax cuts.) Note the article quotes Lindsey Graham as saying spending has been out of control “since the administration came into power.” Funny–the spending that has happened was necessitated by the economic mess left by the Bush Administration, that fought wars and INCREASED SPENDING while cutting taxes. Was it spending out of control? or was it spending while going on a multi-year tax cut binge that was out of control? I’d say the latter.

If you want the right’s take on this, read Amy Ridenour–a self-admitted Rush Limbaugh enthusiast. She thinks Rush’s “logic” is fine. By the way, his argument translates to: we’re in debt [implying it’s all Obama’s fault and not because of the Bush screwups of the economy and the huge amount of borrowing already committed under Bush] so this argument about paying for the war is silly when we already have so much debt; and/or yeah, well, just cut the spending on all those silly programs that progressives have put in place since Roosevelt (Rush calls it the “Fair Deal, New Deal, Rotten Deal, Raw Deal and Great Society”)–ie, the programs (subtracting out Rush’s trash talk) that we as a people have decided over many decades to use to support the vulnerable and improve opportunities for decent living standards for all. And like many right-wingers, Ms. Ridenour claims that her goal is supporting “principles of a free market, individual liberty and personal responsibility, combined with a commitment to a strong national defense.” Amy, how do not paying for the wars we CHOOSE to wage add up to either “personal responsibility” or “commitment to a strong national defense” or even “free market”–since there is no such thing as a “free” market without the stability, institutional structure, and legal forms provided by a stable and functioning government?

At any rate, mainstream commentators seem to think the bill wouldn’t pass, which means that they seem to think that it won’t get substantial Republican support, which the Rush-Ridenour excerpt surely suggests is correct. See David Obey’s war tax, Economist (Nov. 27, 2009). Those very people who are gung ho for war (“commitment to strong national defense”) and gung ho for not having deficits aren’t likely, that is, to vote to pay for the war in which they are so gung ho for others to fight. As the Economist article hints, how better to support the troops than paying for their fight?

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